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What Is a Business Plan? Definition and Planning Essentials Explained

Posted february 21, 2022 by kody wirth.

What is a business plan? It’s the roadmap for your business. The outline of your goals, objectives, and the steps you’ll take to get there. It describes the structure of your organization, how it operates, as well as the financial expectations and actual performance. 

A business plan can help you explore ideas, successfully start a business, manage operations, and pursue growth. In short, a business plan is a lot of different things. It’s more than just a stack of paper and can be one of your most effective tools as a business owner. 

Let’s explore the basics of business planning, the structure of a traditional plan, your planning options, and how you can use your plan to succeed. 

What is a business plan?

A business plan is a document that explains how your business operates. It summarizes your business structure, objectives, milestones, and financial performance. Again, it’s a guide that helps you, and anyone else, better understand how your business will succeed.  

Why do you need a business plan?

The primary purpose of a business plan is to help you understand the direction of your business and the steps it will take to get there. Having a solid business plan can help you grow up to 30% faster and according to our own 2021 Small Business research working on a business plan increases confidence regarding business health—even in the midst of a crisis. 

These benefits are directly connected to how writing a business plan makes you more informed and better prepares you for entrepreneurship. It helps you reduce risk and avoid pursuing potentially poor ideas. You’ll also be able to more easily uncover your business’s potential. By regularly returning to your plan you can understand what parts of your strategy are working and those that are not.

That just scratches the surface for why having a plan is valuable. Check out our full write-up for fifteen more reasons why you need a business plan .  

What can you do with your plan?

So what can you do with a business plan once you’ve created it? It can be all too easy to write a plan and just let it be. Here are just a few ways you can leverage your plan to benefit your business.

Test an idea

Writing a plan isn’t just for those that are ready to start a business. It’s just as valuable for those that have an idea and want to determine if it’s actually possible or not. By writing a plan to explore the validity of an idea, you are working through the process of understanding what it would take to be successful. 

The market and competitive research alone can tell you a lot about your idea. Is the marketplace too crowded? Is the solution you have in mind not really needed? Add in the exploration of milestones, potential expenses, and the sales needed to attain profitability and you can paint a pretty clear picture of the potential of your business.

Document your strategy and goals

For those starting or managing a business understanding where you’re going and how you’re going to get there are vital. Writing your plan helps you do that. It ensures that you are considering all aspects of your business, know what milestones you need to hit, and can effectively make adjustments if that doesn’t happen. 

With a plan in place, you’ll have an idea of where you want your business to go as well as how you’ve performed in the past. This alone better prepares you to take on challenges, review what you’ve done before, and make the right adjustments.

Pursue funding

Even if you do not intend to pursue funding right away, having a business plan will prepare you for it. It will ensure that you have all of the information necessary to submit a loan application and pitch to investors. So, rather than scrambling to gather documentation and write a cohesive plan once it’s relevant, you can instead keep your plan up-to-date and attempt to attain funding. Just add a use of funds report to your financial plan and you’ll be ready to go.

The benefits of having a plan don’t stop there. You can then use your business plan to help you manage the funding you receive. You’ll not only be able to easily track and forecast how you’ll use your funds but easily report on how it’s been used. 

Better manage your business

A solid business plan isn’t meant to be something you do once and forget about. Instead, it should be a useful tool that you can regularly use to analyze performance, make strategic decisions, and anticipate future scenarios. It’s a document that you should regularly update and adjust as you go to better fit the actual state of your business.

Doing so makes it easier to understand what’s working and what’s not. It helps you understand if you’re truly reaching your goals or if you need to make further adjustments. Having your plan in place makes that process quicker, more informative, and leaves you with far more time to actually spend running your business.

What should your business plan include?

The content and structure of your business plan should include anything that will help you use it effectively. That being said, there are some key elements that you should cover and that investors will expect to see. 

Executive summary

The executive summary is a simple overview of your business and your overall plan. It should serve as a standalone document that provides enough detail for anyone—including yourself, team members, or investors—to fully understand your business strategy. Make sure to cover the problem you’re solving, a description of your product or service, your target market, organizational structure, a financial summary, and any necessary funding requirements.

This will be the first part of your plan but it’s easiest to write it after you’ve created your full plan.

Products & Services

When describing your products or services, you need to start by outlining the problem you’re solving and why what you offer is valuable. This is where you’ll also address current competition in the market and any competitive advantages your products or services bring to the table. Lastly, be sure to outline the steps or milestones that you’ll need to hit to successfully launch your business. If you’ve already hit some initial milestones, like taking pre-orders or early funding, be sure to include it here to further prove the validity of your business. 

Market analysis

A market analysis is a qualitative and quantitative assessment of the current market you’re entering or competing in. It helps you understand the overall state and potential of the industry, who your ideal customers are, the positioning of your competition, and how you intend to position your own business. This helps you better explore the long-term trends of the market, what challenges to expect, and how you will need to initially introduce and even price your products or services.

Check out our full guide for how to conduct a market analysis in just four easy steps .  

Marketing & sales

Here you detail how you intend to reach your target market. This includes your sales activities, general pricing plan, and the beginnings of your marketing strategy. If you have any branding elements, sample marketing campaigns, or messaging available—this is the place to add it. 

Additionally, it may be wise to include a SWOT analysis that demonstrates your business or specific product/service position. This will showcase how you intend to leverage sales and marketing channels to deal with competitive threats and take advantage of any opportunities.

Check out our full write-up to learn how to create a cohesive marketing strategy for your business. 

Organization & management

This section addresses the legal structure of your business, your current team, and any gaps that need to be filled. Depending on your business type and longevity, you’ll also need to include your location, ownership information, and business history. Basically, add any information that helps explain your organizational structure and how you operate. This section is particularly important for pitching to investors but should be included even if attempted funding is not in your immediate future.

Financial projections

Possibly the most important piece of your plan, your financials section is vital for showcasing the viability of your business. It also helps you establish a baseline to measure against and makes it easier to make ongoing strategic decisions as your business grows. This may seem complex on the surface, but it can be far easier than you think. 

Focus on building solid forecasts, keep your categories simple, and lean on assumptions. You can always return to this section to add more details and refine your financial statements as you operate. 

Here are the statements you should include in your financial plan:

• Sales and revenue projections
• Profit and loss statement
• Cash flow statement
• Balance sheet

The appendix is where you add additional detail, documentation, or extended notes that support the other sections of your plan. Don’t worry about adding this section at first and only add documentation that you think will be beneficial for anyone reading your plan.

Types of business plans explained

While all business plans cover similar categories, the style and function fully depend on how you intend to use your plan. So, to get the most out of your plan, it’s best to find a format that suits your needs. Here are a few common business plan types worth considering. 

Traditional business plan

The tried-and-true traditional business plan is a formal document meant to be used for external purposes. Typically this is the type of plan you’ll need when applying for funding or pitching to investors. It can also be used when training or hiring employees, working with vendors, or any other situation where the full details of your business must be understood by another individual. 

This type of business plan follows the outline above and can be anywhere from 10-50 pages depending on the amount of detail included, the complexity of your business, and what you include in your appendix. We recommend only starting with this business plan format if you plan to immediately pursue funding and already have a solid handle on your business information. 

Business model canvas

The business model canvas is a one-page template designed to demystify the business planning process. It removes the need for a traditional, copy-heavy business plan, in favor of a single-page outline that can help you and outside parties better explore your business idea. 

The structure ditches a linear structure in favor of a cell-based template. It encourages you to build connections between every element of your business. It’s faster to write out and update, and much easier for you, your team, and anyone else to visualize your business operations. This is really best for those exploring their business idea for the first time, but keep in mind that it can be difficult to actually validate your idea this way as well as adapt it into a full plan.

One-page business plan

The true middle ground between the business model canvas and a traditional business plan is the one-page business plan. This format is a simplified version of the traditional plan that focuses on the core aspects of your business. It basically serves as a beefed-up pitch document and can be finished as quickly as the business model canvas.

By starting with a one-page plan, you give yourself a minimal document to build from. You’ll typically stick with bullet points and single sentences making it much easier to elaborate or expand sections into a longer-form business plan. This plan type is useful for those exploring ideas, needing to validate their business model, or who need an internal plan to help them run and manage their business.

Now, the option that we here at LivePlan recommend is the Lean Plan . This is less of a specific document type and more of a methodology. It takes the simplicity and styling of the one-page business plan and turns it into a process for you to continuously plan, test, review, refine, and take action based on performance.

It holds all of the benefits of the single-page plan, including the potential to complete it in as little as 27-minutes . However, it’s even easier to convert into a full plan thanks to how heavily it’s tied to your financials. The overall goal of Lean Planning isn’t to just produce documents that you use once and shelve. Instead, the Lean Planning process helps you build a healthier company that thrives in times of growth and stable through times of crisis.

It’s faster, keeps your plan concise, and ensures that your plan is always up-to-date.

Try the LivePlan Method for Lean Business Planning

Now that you know the basics of business planning, it’s time to get started. Again we recommend leveraging a Lean Plan for a faster, easier, and far more useful planning process. 

To get familiar with the Lean Plan format, you can download our free Lean Plan template . However, if you want to elevate your ability to create and use your lean plan even further, you may want to explore LivePlan. 

It features step-by-step guidance that ensures you cover everything necessary while reducing the time spent on formatting and presenting. You’ll also gain access to financial forecasting tools that propel you through the process. Finally, it will transform your plan into a management tool that will help you easily compare your forecasts to your actual results. 

Check out how LivePlan streamlines Lean Planning by downloading our Kickstart Your Business ebook .

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What is a Business Plan? Definition, Tips, and Templates

Published: June 07, 2023

In an era where more than 20% of small enterprises fail in their first year, having a clear, defined, and well-thought-out business plan is a crucial first step for setting up a business for long-term success.

Business plans are a required tool for all entrepreneurs, business owners, business acquirers, and even business school students. But … what exactly is a business plan?

In this post, we'll explain what a business plan is, the reasons why you'd need one, identify different types of business plans, and what you should include in yours.

What is a business plan?

A business plan is a documented strategy for a business that highlights its goals and its plans for achieving them. It outlines a company's go-to-market plan, financial projections, market research, business purpose, and mission statement. Key staff who are responsible for achieving the goals may also be included in the business plan along with a timeline.

The business plan is an undeniably critical component to getting any company off the ground. It's key to securing financing, documenting your business model, outlining your financial projections, and turning that nugget of a business idea into a reality.

What is a business plan used for?

The purpose of a business plan is three-fold: It summarizes the organization’s strategy in order to execute it long term, secures financing from investors, and helps forecast future business demands.

Business Plan Template [ Download Now ]

Working on your business plan? Try using our Business Plan Template . Pre-filled with the sections a great business plan needs, the template will give aspiring entrepreneurs a feel for what a business plan is, what should be in it, and how it can be used to establish and grow a business from the ground up.

Purposes of a Business Plan

Chances are, someone drafting a business plan will be doing so for one or more of the following reasons:

1. Securing financing from investors.

Since its contents revolve around how businesses succeed, break even, and turn a profit, a business plan is used as a tool for sourcing capital. This document is an entrepreneur's way of showing potential investors or lenders how their capital will be put to work and how it will help the business thrive.

All banks, investors, and venture capital firms will want to see a business plan before handing over their money, and investors typically expect a 10% ROI or more from the capital they invest in a business.

Therefore, these investors need to know if — and when — they'll be making their money back (and then some). Additionally, they'll want to read about the process and strategy for how the business will reach those financial goals, which is where the context provided by sales, marketing, and operations plans come into play.

2. Documenting a company's strategy and goals.

A business plan should leave no stone unturned.

Business plans can span dozens or even hundreds of pages, affording their drafters the opportunity to explain what a business' goals are and how the business will achieve them.

To show potential investors that they've addressed every question and thought through every possible scenario, entrepreneurs should thoroughly explain their marketing, sales, and operations strategies — from acquiring a physical location for the business to explaining a tactical approach for marketing penetration.

These explanations should ultimately lead to a business' break-even point supported by a sales forecast and financial projections, with the business plan writer being able to speak to the why behind anything outlined in the plan.

Free Business Plan Template

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Free Business Plan [Template]

Fill out the form to access your free business plan., 3. legitimizing a business idea..

Everyone's got a great idea for a company — until they put pen to paper and realize that it's not exactly feasible.

A business plan is an aspiring entrepreneur's way to prove that a business idea is actually worth pursuing.

As entrepreneurs document their go-to-market process, capital needs, and expected return on investment, entrepreneurs likely come across a few hiccups that will make them second guess their strategies and metrics — and that's exactly what the business plan is for.

It ensures an entrepreneur's ducks are in a row before bringing their business idea to the world and reassures the readers that whoever wrote the plan is serious about the idea, having put hours into thinking of the business idea, fleshing out growth tactics, and calculating financial projections.

4. Getting an A in your business class.

Speaking from personal experience, there's a chance you're here to get business plan ideas for your Business 101 class project.

If that's the case, might we suggest checking out this post on How to Write a Business Plan — providing a section-by-section guide on creating your plan?

What does a business plan need to include?

• Business Plan Subtitle
• Executive Summary
• Company Description
• The Business Opportunity
• Competitive Analysis
• Target Market
• Marketing Plan
• Financial Summary
• Funding Requirements

1. Business Plan Subtitle

Every great business plan starts with a captivating title and subtitle. You’ll want to make it clear that the document is, in fact, a business plan, but the subtitle can help tell the story of your business in just a short sentence.

2. Executive Summary

Although this is the last part of the business plan that you’ll write, it’s the first section (and maybe the only section) that stakeholders will read. The executive summary of a business plan sets the stage for the rest of the document. It includes your company’s mission or vision statement, value proposition, and long-term goals.

3. Company Description

This brief part of your business plan will detail your business name, years in operation, key offerings, and positioning statement. You might even add core values or a short history of the company. The company description’s role in a business plan is to introduce your business to the reader in a compelling and concise way.

4. The Business Opportunity

The business opportunity should convince investors that your organization meets the needs of the market in a way that no other company can. This section explains the specific problem your business solves within the marketplace and how it solves them. It will include your value proposition as well as some high-level information about your target market.

5. Competitive Analysis

Just about every industry has more than one player in the market. Even if your business owns the majority of the market share in your industry or your business concept is the first of its kind, you still have competition. In the competitive analysis section, you’ll take an objective look at the industry landscape to determine where your business fits. A SWOT analysis is an organized way to format this section.

6. Target Market

Who are the core customers of your business and why? The target market portion of your business plan outlines this in detail. The target market should explain the demographics, psychographics, behavioristics, and geographics of the ideal customer.

7. Marketing Plan

Marketing is expansive, and it’ll be tempting to cover every type of marketing possible, but a brief overview of how you’ll market your unique value proposition to your target audience, followed by a tactical plan will suffice.

Think broadly and narrow down from there: Will you focus on a slow-and-steady play where you make an upfront investment in organic customer acquisition? Or will you generate lots of quick customers using a pay-to-play advertising strategy? This kind of information should guide the marketing plan section of your business plan.

8. Financial Summary

Money doesn’t grow on trees and even the most digital, sustainable businesses have expenses. Outlining a financial summary of where your business is currently and where you’d like it to be in the future will substantiate this section. Consider including any monetary information that will give potential investors a glimpse into the financial health of your business. Assets, liabilities, expenses, debt, investments, revenue, and more are all useful adds here.

So, you’ve outlined some great goals, the business opportunity is valid, and the industry is ready for what you have to offer. Who’s responsible for turning all this high-level talk into results? The "team" section of your business plan answers that question by providing an overview of the roles responsible for each goal. Don’t worry if you don’t have every team member on board yet, knowing what roles to hire for is helpful as you seek funding from investors.

10. Funding Requirements

Remember that one of the goals of a business plan is to secure funding from investors, so you’ll need to include funding requirements you’d like them to fulfill. The amount your business needs, for what reasons, and for how long will meet the requirement for this section.

Types of Business Plans

• Startup Business Plan
• Feasibility Business Plan
• Internal Business Plan
• Strategic Business Plan
• Business Acquisition Plan
• Business Repositioning Plan
• Expansion or Growth Business Plan

There’s no one size fits all business plan as there are several types of businesses in the market today. From startups with just one founder to historic household names that need to stay competitive, every type of business needs a business plan that’s tailored to its needs. Below are a few of the most common types of business plans.

For even more examples, check out these sample business plans to help you write your own .

1. Startup Business Plan

As one of the most common types of business plans, a startup business plan is for new business ideas. This plan lays the foundation for the eventual success of a business.

The biggest challenge with the startup business plan is that it’s written completely from scratch. Startup business plans often reference existing industry data. They also explain unique business strategies and go-to-market plans.

Because startup business plans expand on an original idea, the contents will vary by the top priority goals.

For example, say a startup is looking for funding. If capital is a priority, this business plan might focus more on financial projections than marketing or company culture.

2. Feasibility Business Plan

This type of business plan focuses on a single essential aspect of the business — the product or service. It may be part of a startup business plan or a standalone plan for an existing organization. This comprehensive plan may include:

• A detailed product description
• Market analysis
• Technology needs
• Production needs
• Financial sources
• Production operations

According to CBInsights research, 35% of startups fail because of a lack of market need. Another 10% fail because of mistimed products.

Some businesses will complete a feasibility study to explore ideas and narrow product plans to the best choice. They conduct these studies before completing the feasibility business plan. Then the feasibility plan centers on that one product or service.

3. Internal Business Plan

Internal business plans help leaders communicate company goals, strategy, and performance. This helps the business align and work toward objectives more effectively.

Besides the typical elements in a startup business plan, an internal business plan may also include:

• Department-specific budgets
• Target demographic analysis
• Market size and share of voice analysis
• Action plans
• Sustainability plans

Most external-facing business plans focus on raising capital and support for a business. But an internal business plan helps keep the business mission consistent in the face of change.

4. Strategic Business Plan

Strategic business plans focus on long-term objectives for your business. They usually cover the first three to five years of operations. This is different from the typical startup business plan which focuses on the first one to three years. The audience for this plan is also primarily internal stakeholders.

These types of business plans may include:

• Relevant data and analysis
• Assessments of company resources
• Vision and mission statements

It's important to remember that, while many businesses create a strategic plan before launching, some business owners just jump in. So, this business plan can add value by outlining how your business plans to reach specific goals. This type of planning can also help a business anticipate future challenges.

5. Business Acquisition Plan

Investors use business plans to acquire existing businesses, too — not just new businesses.

A business acquisition plan may include costs, schedules, or management requirements. This data will come from an acquisition strategy.

A business plan for an existing company will explain:

• How an acquisition will change its operating model
• What will stay the same under new ownership
• Why things will change or stay the same
• Acquisition planning documentation
• Timelines for acquisition

Additionally, the business plan should speak to the current state of the business and why it's up for sale.

For example, if someone is purchasing a failing business, the business plan should explain why the business is being purchased. It should also include:

• What the new owner will do to turn the business around
• Historic business metrics
• Sales projections after the acquisition
• Justification for those projections

6. Business Repositioning Plan

When a business wants to avoid acquisition, reposition its brand, or try something new, CEOs or owners will develop a business repositioning plan.

This plan will:

• Acknowledge the current state of the company.
• State a vision for the future of the company.
• Explain why the business needs to reposition itself.
• Outline a process for how the company will adjust.

Companies planning for a business reposition often do so — proactively or retroactively — due to a shift in market trends and customer needs.

For example, shoe brand AllBirds plans to refocus its brand on core customers and shift its go-to-market strategy. These decisions are a reaction to lackluster sales following product changes and other missteps.

7. Expansion or Growth Business Plan

When your business is ready to expand, a growth business plan creates a useful structure for reaching specific targets.

For example, a successful business expanding into another location can use a growth business plan. This is because it may also mean the business needs to focus on a new target market or generate more capital.

This type of plan usually covers the next year or two of growth. It often references current sales, revenue, and successes. It may also include:

• SWOT analysis
• Growth opportunity studies
• Financial goals and plans
• Marketing plans
• Capability planning

These types of business plans will vary by business, but they can help businesses quickly rally around new priorities to drive growth.

Getting Started With Your Business Plan

At the end of the day, a business plan is simply an explanation of a business idea and why it will be successful. The more detail and thought you put into it, the more successful your plan — and the business it outlines — will be.

When writing your business plan, you’ll benefit from extensive research, feedback from your team or board of directors, and a solid template to organize your thoughts. If you need one of these, download HubSpot's Free Business Plan Template below to get started.

Editor's note: This post was originally published in August 2020 and has been updated for comprehensiveness.

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What Is A Business Plan (& Do I Really Need One?)

The term "business plan" is a familiar one, often bandied about in entrepreneurial circles. Yet, despite its ubiquity, it's remarkable how much mystery and confusion can surround this essential business tool.

What exactly is a business plan? What purpose does it serve? How is it structured? This article aims to lift the veil, demystifying the business plan and revealing its multifaceted nature.

Business Plan Definition

A business plan is a document that describes a company's objectives and its marketing, financial, and operational strategies for achieving them. It's more than a mere document; it's a structured communication tool designed to articulate the vision of the business, allowing stakeholders to easily find the information they seek.

The business plan is a tangible reflection of the strategic planning that has gone into the business's future. While the plan is a static document, the planning is a dynamic process, capturing the strategic thinking and decision-making that shape the business's direction.

Purposes of a Business Plan

1. attracting funding opportunities.

A well-crafted business plan illustrates the company's potential for growth and profitability. It outlines the company's vision, mission, and strategies, providing a clear roadmap for success. A potential investor, whether venture capitalists or angel investors, can see how capital will be utilized, fostering trust and confidence in the business venture. A bank or financial institution can assess your company's ability to meet debt service obligations and compliance with strict financial accounting to meet underwriting requirements.

2. Aligning Organizational Objectives

A business plan acts as a unifying document that aligns the team with the company's goals and strategies. It ensures that everyone is on the same page, working towards common objectives. This alignment fosters collaboration and efficiency, driving the business towards its targets.

3. Validating the Business Concept

Before launching, a business plan helps in validating the feasibility of the business idea. It's a rigorous process that tests the concept against real-world scenarios, ensuring that the idea is not only innovative but also practical and sustainable. This validation builds credibility and prepares the business for the challenges ahead. For an existing business, a business plan can help address a possible merger and acquisition (M&A), rolling out a new business product or location, or expanding the target market.

4. Facilitating Legal and Regulatory Compliance

Whether it's securing a visa for international operations or meeting other regulatory requirements, a business plan can be an essential tool. It provides the necessary information in a structured format, demonstrating compliance with legal and regulatory standards. This can streamline processes and prevent potential legal hurdles.

5. Articulating and Formalizing the Business Vision

The business plan is more than a set of numbers and projections; it's the embodiment of the business vision. It communicates the essence of the business to stakeholders, turning abstract ideas into a concrete operational plan. It's a vital tool for leadership to articulate and formalize the vision, setting the stage for strategic execution.

Identifying the Right Type of Business Plan

Once you understand who your business plan is for and what specific needs it must address, you can identify the type of plan that best suits your situation. Business plans can be categorized into two main types: traditional and lean, each serveing its own unique purpose.

Traditional Business Plan

The Traditional Business Plan is a detailed and comprehensive document, often used by a new business, especially those seeking significant funding. It provides a complete picture of the company's vision, strategies, and operations. A traditional business plan leaves no stone unturned, offering a robust tool that communicates the business's entire vision and plan to stakeholders.

Lean Business Plan

In contrast, the Lean Business Plan is an abbreviated structure that still emphasizes the key elements of a Traditional Business Plan, but in less detail. It's suitable for early-stage startups, small businesses, or situations where agility and speed are essential. The Lean Business Plan focuses on the essentials, providing a quick overview without overwhelming details. It's a flexible and adaptable tool that can evolve with the business. One of the primary distinctions between it and a Traditional Business Plan is that a Lean Business Plan does not typically include financial planning, or if it does, it's a simple financial forecast or cash burn.

Components of a Business Plan

There are many places online where you can buy a business plan template. Often, those documents are just an outline of the sections of the business plan and what is included in each. If that's what you're looking for, here's a good business plan outline:

Executive Summary

The Executive Summary is the first section read but often the last written, as it encapsulates the entire plan. If the company has a mission statement, it's typically included here. When used for funding, it includes the ask or uses of funds, and for investment, it may contain an investor proposition. It's a concise overview that sets the tone, summarizing each section that follows.

Company Overview

The Company Overview is the foundation of the business, articulating how it operates, generates revenue, and delivers unique value to its customers. This section defines products and/or service the business sells, as well as the company’s business model and unique value proposition. It covers key partners, pricing strategy, revenue model, and other essential business activities. 

Market Analysis Summary

The Market Analysis is the business intelligence portion of the plan. It comprises an industry analysis, market segments, target customers, competitive analysis, competitive advantage. This section provides insights into the market landscape, identifying opportunities, challenges, and how the business positions itself uniquely within the industry.

Strategy & Implementation Summary

Here, the business plan should outline the short-term and long-term objectives, marketing strategy and sales approach. It's a roadmap that details how the business will achieve its goals, including tactical steps, timelines, and resources. In a business plan for investors, the inclusion of an exit strategy can provide a vision for the future, considering various potential outcomes.

Management Summary

The Management Summary offers profiles of key personnel, their qualifications, roles, and plans to fill talent gaps. It's a snapshot of the leadership team, providing assurance that the right people are in place to execute the business plan successfully.

Financial Projections

This section includes standard financial statements like the profit & loss statement (P&L), the balance sheet, and the cash flow statement. It offers a detailed financial blueprint, illustrating the company’s revenue drivers and unit assumptions, income statement, a break-even analysis, and a sensitivity analysis to examine how changes in variables affect outcomes. For businesses with complex structures, framing the revenue in terms of market share can offer additional insight into the viability and feasibility of the financial projections.

The Appendices often include year 1 and year 2 monthly financial statements, intellectual property like patents and trademarks, construction blueprints, and other essential documentation. It's a repository for supporting information that adds depth and context to the main sections of the plan.

Do I Need a Business Plan?

The question "Do I need a business plan?" is one that many entrepreneurs and business leaders grapple with. The answer, however, is not as straightforward as it might seem. While not every business requires a traditional business plan, the strategic planning process is essential for all. 

In some cases, a traditional business plan is required. Applying for a Small Business Administration (SBA) loan , obtaining a entrepreneurship visa , or meeting specific investor requirements may mandate a comprehensive business plan.

However a traditional business plan isn’t always necessary. For example, in early-stage investor funding, particularly in industries like SaaS, a lean business plan accompanied by a pitch deck presentation will often suffice. The focus here is on agility and essential information rather than exhaustive detail.

Every Business Needs Business Planning

Unlike the traditional business plan, which may or may not be required depending on the situation, business planning as a process is indispensable for every business, regardless of size or stage.

Business planning is a dynamic, continuous process. It's not confined to a single document but evolves with the business, adapting to changes, challenges, and opportunities. Effective strategic planning ensures internal alignment with both long-term vision and short-term objectives. It's a holistic approach that guides business goal-setting decision-making, resource allocation, and strategic direction. It often serves as the basis for a fully developed marketing plan.

Every business, from a small startup to a large corporation, benefits from strategic planning. It's a practice that fosters growth, innovation, and resilience, providing a roadmap for success.

Not every business needs a traditional business plan as a document, but all businesses need to engage in business planning as a process. While the traditional business plan serves specific purposes and audiences, business planning is a universal practice that guides and grows the business.

Entrepreneurs and business leaders must assess their specific needs, recognizing that the traditional business plan is just one tool among many. The true value of the business plan lies in continuous planning, adapting, and aligning with the unique vision and goals of the business.

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What Is a Business Plan?

Business Plan Explained in Less Than 5 Minutes

Definition and Examples of a Business Plan

How a business plan works, types of business plans, business plan vs. business model.

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A business plan is a detailed written document that describes your business’s activities, goals, and strategy. A strong plan outlines everything from the products a company sells to the executive summary to the overall management. In essence, a business plan should guide a founder’s actions through each stage of growth

Think of your business plan as a road map. It documents the various stages of starting and running your business, including business activities and objectives. Business plans create the structure you need to make decisions by outlining the financial and operational goals you’re striving toward. 

One of the most common reasons for crafting a business plan is to attract investors—and, in return, receive funding. As an early stage company, for example, you may leverage your business plan to convince investors or banks that your entity is credible and worthy of funding. The business plan should prove that their money will be returned . 

A business plan can also be useful for when a well-developed company goes through a merger or acquisition . As outlined by the U.S. Small Business Administration (SBA), a merger creates a new entity via the combination of two businesses. An acquisition, on the other hand, is when a company is purchased and absorbed into an existing business. In either case, a business plan helps establish relationships between business entities, making a merger or acquisition more likely.

• Alternate name : Strategic plan

A business plan is a formalized outline of the business operations, finances, and goals you aim to achieve to be a successful company. When designing a business plan, companies have leeway for how long, short, or detailed it can be. So long as it outlines the foundational aspects of the business, in most cases, it will be effective.

The most common type of business plan is a traditional business plan. This style tends to have the following common elements, generally in this order.

• Executive summary : Tells your reader why your company will be successful. Includes the company’s mission statement , product information, and basics regarding the business structure. 
• Company description : Where you brag about your entity’s strengths. Answer the question, what problem is your team solving?
• Market analysis : A deep dive into your industry and the competition. Consider why competitors are successful. How can your offering do it better? If applicable, how can you enhance the experience for the consumer? 
• Management plan : Outlines leadership structure of the company and may be best detailed as a chart. This way, readers can see exactly who is planning to run the company and how they will impact growth. 
• Marketing and sales plan : Details how you’ll attract consumers with your product or service, and how you will retain those customers. All strategies outlined in this section, such as the use of digital marketing , will be referenced in your financial plan. 
• Funding request : For those companies asking for funding, this is where you’ll detail the amount of funding you’ll need to achieve your goals. Clearly explain how much you need and what it will be used for.
• Financial plan : Convinces the reader that your company is financially stable and can turn a profit . You will need to include a balance sheet , an income statement, and the cash flow statement (or cash flow projection, in the case of a new venture). 
• Appendix : Where any supporting documents, such as legal documents, licenses of employees, and pictures of the product will be included. 

Your company’s business plan should fit your needs, which will often depend on what stage of growth you are in. If you are considering starting a new venture, for example, writing a detailed business plan can help prove if your concept is viable or not. 

If your business is seeking financial capital, though, you will want your business plan to be investor-ready. This will require you to have a funding request section, which would be placed right above your financial plan.

You should avoid using lofty terms or technical jargon that those outside your team won’t understand. A business plan is meant to be shared with those inside and outside your organization. Simple and effective language is best.

Your business’s stage impacts the length and detail of a business plan. As discussed, a traditional plan follows a detailed structure, from the executive summary to the appendix. It is a lengthier document, often amounting to dozens of pages, and is often used when seeking funding to prove business viability. In most cases, crafting a traditional plan will take lots of due diligence work.

The other main type of business plan is a lean startup plan. A lean startup plan is much more high-level and shorter than the traditional version. Companies just starting development will often create a lean startup plan to help them navigate where they should start. These can be as short as one or two pages. 

A lean plan will include the following elements.

• Key partnerships : Notes other services or businesses you will work with, such as manufacturers and suppliers. 
• Key activities and resources : Outlines how your company will gain a competitive advantage and create value for your consumers. Resources you may leverage include capital, staff, or intellectual property.
• Value proposition : Clearly defines the unique value your company offers.
• Customer relationships : Details the customer experience from start to finish. 
• Channels : How will you stay connected with your customers? Detail those methods here.
• Cost structure and revenue streams : Details the most significant costs you will face as well as how your business will actually make money.  

Remember that business plans are meant to change as your company grows or pivots. You should actively review and edit your business plan to keep it up to date with business activities. For example, you may start with a lean plan and move to a traditional plan when you hit the fundraising stage.

A business plan may often be confused with a business model, and it is easy to understand why. Simply put, a business plan is the holistic overview of the business, while a business model is a skeleton for how money will be made.

Key Takeaways

• A business plan is a comprehensive document that outlines a business’s operations, finances, and goals. It guides the business’s day-to-day decisions.
• A business plan is necessary for your company’s success, as it creates a path to scalability.
• There are two main types of business plans: a traditional business plan and a lean startup plan.
• A traditional business plan will be essential when you begin to seek debt or equity capital for your company.

U.S. Small Business Administration. “ Merge and Acquire Businesses .” Accessed June 8, 2021.

U.S. Small Business Administration. " Write Your Business Plan ." Accessed June 8, 2021.

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Business Plan

By Entrepreneur Staff

Business Plan Definition:

A written document describing the nature of the business, the sales and marketing strategy, and the financial background, and containing a projected profit and loss statement

A business plan is also a road map that provides directions so a business can plan its future and helps it avoid bumps in the road. The time you spend making your business plan thorough and accurate, and keeping it up-to-date, is an investment that pays big dividends in the long term.

Your business plan should conform to generally accepted guidelines regarding form and content. Each section should include specific elements and address relevant questions that the people who read your plan will most likely ask. Generally, a business plan has the following components:

Title Page and Contents A business plan should be presented in a binder with a cover listing the name of the business, the name(s) of the principal(s), address, phone number, e-mail and website addresses, and the date. You don't have to spend a lot of money on a fancy binder or cover. Your readers want a plan that looks professional, is easy to read and is well-put-together.

Include the same information on the title page. If you have a logo, you can use it, too. A table of contents follows the executive summary or statement of purpose, so that readers can quickly find the information or financial data they need.

Executive Summary The executive summary, or statement of purpose, succinctly encapsulates your reason for writing the business plan. It tells the reader what you want and why, right up front. Are you looking for a $10,000 loan to remodel and refurbish your factory? A loan of $25,000 to expand your product line or buy new equipment? How will you repay your loan, and over what term? Would you like to find a partner to whom you'd sell 25 percent of the business? What's in it for him or her? The questions that pertain to your situation should be addressed here clearly and succinctly.

The summary or statement should be no more than half a page in length and should touch on the following key elements:

• Business concept describes the business, its product, the market it serves and the business' competitive advantage.
• Financial features include financial highlights, such as sales and profits.
• Financial requirements state how much capital is needed for startup or expansion, how it will be used and what collateral is available.
• Current business position furnishes relevant information about the company, its legal form of operation, when it was founded, the principal owners and key personnel.
• Major achievements points out anything noteworthy, such as patents, prototypes, important contracts regarding product development, or results from test marketing that have been conducted.

Description of the Business The business description usually begins with a short explanation of the industry. When describing the industry, discuss what's going on now as well as the outlook for the future. Do the necessary research so you can provide information on all the various markets within the industry, including references to new products or developments that could benefit or hinder your business. Base your observations on reliable data and be sure to footnote and cite your sources of information when necessary. Remember that bankers and investors want to know hard facts--they won't risk money on assumptions or conjecture.

When describing your business, say which sector it falls into (wholesale, retail, food service, manufacturing, hospitality and so on), and whether the business is new or established. Then say whether the business is a sole proprietorship, partnership, C or Sub chapter S corporation. Next, list the business' principals and state what they bring to the business. Continue with information on who the business' customers are, how big the market is, and how the product or service is distributed and marketed.

Description of the Product or Service The business description can be a few paragraphs to a few pages in length, depending on the complexity of your plan. If your plan isn't too complicated, keep your business description short, describing the industry in one paragraph, the product in another, and the business and its success factors in two or three more paragraphs.

When you describe your product or service, make sure your reader has a clear idea of what you're talking about. Explain how people use your product or service and talk about what makes your product or service different from others available in the market. Be specific about what sets your business apart from those of your competitors.

Then explain how your business will gain a competitive edge and why your business will be profitable. Describe the factors you think will make it successful. If your business plan will be used as a financing proposal, explain why the additional equity or debt will make your business more profitable. Give hard facts, such as "new equipment will create an income stream of $10,000 per year" and briefly describe how.

Other information to address here is a description of the experience of the other key people in the business. Whoever reads your business plan will want to know what suppliers or experts you've spoken to about your business and their response to your idea. They may even ask you to clarify your choice of location or reasons for selling this particular product.

Market Analysis A thorough market analysis will help you define your prospects as well as help you establish pricing, distribution, and promotional strategies that will allow your company to be successful vis-à-vis your competition, both in the short and long term.

Begin your market analysis by defining the market in terms of size, demographics, structure, growth prospects, trends, and sales potential. Next, determine how often your product or service will be purchased by your target market. Then figure out the potential annual purchase. Then figure out what percentage of this annual sum you either have or can attain. Keep in mind that no one gets 100 percent market share, and that a something as small as 25 percent is considered a dominant share. Your market share will be a benchmark that tells you how well you're doing in light of your market-planning projections.

You'll also have to describe your positioning strategy. How you differentiate your product or service from that of your competitors and then determine which market niche to fill is called "positioning." Positioning helps establish your product or service's identity within the eyes of the purchaser. A positioning statement for a business plan doesn't have to be long or elaborate, but it does need to point out who your target market is, how you'll reach them, what they're really buying from you, who your competitors are, and what your USP (unique selling proposition) is.

How you price your product or service is perhaps your most important marketing decision. It's also one of the most difficult to make for most small business owners, because there are no instant formulas. Many methods of establishing prices are available to you, but these are among the most common.

• Cost-plus pricing is used mainly by manufacturers to assure that all costs, both fixed and variable, are covered and the desired profit percentage is attained.
• Demand pricing is used by companies that sell their products through a variety of sources at differing prices based on demand.
• Competitive pricing is used by companies that are entering a market where there's already an established price and it's difficult to differentiate one product from another.
• Markup pricing is used mainly by retailers and is calculated by adding your desired profit to the cost of the product.

You'll also have to determine distribution, which includes the entire process of moving the product from the factory to the end user. Make sure to analyze your competitors' distribution channels before deciding whether to use the same type of channel or an alternative that may provide you with a strategic advantage.

Finally, your promotion strategy should include all the ways you communicate with your markets to make them aware of your products or services. To be successful, your promotion strategy should address advertising, packaging, public relations, sales promotions and personal sales.

Competitive Analysis The purpose of the competitive analysis is to determine:

• the strengths and weaknesses of the competitors within your market.
• strategies that will provide you with a distinct advantage.
• barriers that can be developed to prevent competition from entering your market.
• any weaknesses that can be exploited in the product development cycle.

The first step in a competitor analysis is to identify both direct and indirect competition for your business, both now and in the future. Once you've grouped your competitors, start analyzing their marketing strategies and identifying their vulnerable areas by examining their strengths and weaknesses. This will help you determine your distinct competitive advantage.

Whoever reads your business plan should be very clear on who your target market is, what your market niche is, exactly how you'll stand apart from your competitors, and why you'll be successful doing so.

Operations and Management The operations and management component of your plan is designed to describe how the business functions on a continuing basis. The operations plan highlights the logistics of the organization, such as the responsibilities of the management team, the tasks assigned to each division within the company, and capital and expense requirements related to the operations of the business.

Financial Components of Your Business Plan After defining the product, market and operations, the next area to turn your attention to are the three financial statements that form the backbone of your business plan: the income statement, cash flow statement, and balance sheet.

The income statement is a simple and straightforward report on the business' cash-generating ability. It is a scorecard on the financial performance of your business that reflects when sales are made and when expenses are incurred. It draws information from the various financial models developed earlier such as revenue, expenses, capital (in the form of depreciation), and cost of goods. By combining these elements, the income statement illustrates just how much your company makes or loses during the year by subtracting cost of goods and expenses from revenue to arrive at a net result, which is either a profit or loss. In addition to the income statements, include a note analyzing the results. The analysis should be very short, emphasizing the key points of the income statement. Your CPA can help you craft this.

The cash flow statement is one of the most critical information tools for your business, since it shows how much cash you'll need to meet obligations, when you'll require it and where it will come from. The result is the profit or loss at the end of each month and year. The cash flow statement carries both profits and losses over to the next month to also show the cumulative amount. Running a loss on your cash flow statement is a major red flag that indicates not having enough cash to meet expenses-something that demands immediate attention and action.

The cash flow statement should be prepared on a monthly basis during the first year, on a quarterly basis for the second year, and annually for the third year. The following 17 items are listed in the order they need to appear on your cash flow statement. As with the income statement, you'll need to analyze the cash flow statement in a short summary in the business plan. Once again, the analysis doesn't have to be long and should cover highlights only. Ask your CPA for help.

The last financial statement you'll need is a balance sheet. Unlike the previous financial statements, the balance sheet is generated annually for the business plan and is, more or less, a summary of all the preceding financial information broken down into three areas: assets, liabilities and equity.

Balance sheets are used to calculate the net worth of a business or individual by measuring assets against liabilities. If your business plan is for an existing business, the balance sheet from your last reporting period should be included. If the business plan is for a new business, try to project what your assets and liabilities will be over the course of the business plan to determine what equity you may accumulate in the business. To obtain financing for a new business, you'll need to include a personal financial statement or balance sheet.

In the business plan, you'll need to create an analysis for the balance sheet just as you need to do for the income and cash flow statements. The analysis of the balance sheet should be kept short and cover key points.

Supporting Documents In this section, include any other documents that are of interest to your reader, such as your resume; contracts with suppliers, customers, or clients, letters of reference, letters of intent, copy of your lease and any other legal documents, tax returns for the previous three years, and anything else relevant to your business plan.

Some people think you don't need a business plan unless you're trying to borrow money. Of course, it's true that you do need a good plan if you intend to approach a lender--whether a banker, a venture capitalist or any number of other sources--for startup capital. But a business plan is more than a pitch for financing; it's a guide to help you define and meet your business goals.

Just as you wouldn't start off on a cross-country drive without a road map, you should not embark on your new business without a business plan to guide you. A business plan won't automatically make you a success, but it will help you avoid some common causes of business failure, such as under-capitalization or lack of an adequate market.

As you research and prepare your business plan, you'll find weak spots in your business idea that you'll be able to repair. You'll also discover areas with potential you may not have thought about before--and ways to profit from them. Only by putting together a business plan can you decide whether your great idea is really worth your time and investment.

More from Business Plans

Financial projections.

Estimates of the future financial performance of a business

Financial Statement

A written report of the financial condition of a firm. Financial statements include the balance sheet, income statement, statement of changes in net worth and statement of cash flow.

Executive Summary

A nontechnical summary statement at the beginning of a business plan that's designed to encapsulate your reason for writing the plan

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What is a Business Plan? Definition and Resources

9 min. read

Updated April 10, 2024

If you’ve ever jotted down a business idea on a napkin with a few tasks you need to accomplish, you’ve written a business plan — or at least the very basic components of one.

The origin of formal business plans is murky. But they certainly go back centuries. And when you consider that 20% of new businesses fail in year 1 , and half fail within 5 years, the importance of thorough planning and research should be clear.

But just what is a business plan? And what’s required to move from a series of ideas to a formal plan? Here we’ll answer that question and explain why you need one to be a successful business owner.

• What is a business plan?

A business plan lays out a strategic roadmap for any new or growing business.

Any entrepreneur with a great idea for a business needs to conduct market research , analyze their competitors , validate their idea by talking to potential customers, and define their unique value proposition .

The business plan captures that opportunity you see for your company: it describes your product or service and business model , and the target market you’ll serve. 

It also includes details on how you’ll execute your plan: how you’ll price and market your solution and your financial projections .

Reasons for writing a business plan

If you’re asking yourself, ‘Do I really need to write a business plan?’ consider this fact: 

Companies that commit to planning grow 30% faster than those that don’t.

Creating a business plan is crucial for businesses of any size or stage. 

If you plan to raise funds for your business through a traditional bank loan or SBA loan , none of them will want to move forward without seeing your business plan. Venture capital firms may or may not ask for one, but you’ll still need to do thorough planning to create a pitch that makes them want to invest.

But it’s more than just a means of getting your business funded . The plan is also your roadmap to identify and address potential risks. 

It’s not a one-time document. Your business plan is a living guide to ensure your business stays on course.

Related: 14 of the top reasons why you need a business plan

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What research shows about business plans

Numerous studies have established that planning improves business performance:

• 71% of fast-growing companies have business plans that include budgets, sales goals, and marketing and sales strategies.
• Companies that clearly define their value proposition are more successful than those that can’t.
• Companies or startups with a business plan are more likely to get funding than those without one.
• Starting the business planning process before investing in marketing reduces the likelihood of business failure.

The planning process significantly impacts business growth for existing companies and startups alike.

Read More: Research-backed reasons why writing a business plan matters

When should you write a business plan?

No two business plans are alike. 

Yet there are similar questions for anyone considering writing a plan to answer. One basic but important question is when to start writing it.

A Harvard Business Review study found that the ideal time to write a business plan is between 6 and 12 months after deciding to start a business. 

But the reality can be more nuanced – it depends on the stage a business is in, or the type of business plan being written.

Ideal times to write a business plan include:

• When you have an idea for a business
• When you’re starting a business
• When you’re preparing to buy (or sell)
• When you’re trying to get funding
• When business conditions change
• When you’re growing or scaling your business

Read More: The best times to write or update your business plan

How often should you update your business plan?

As is often the case, how often a business plan should be updated depends on your circumstances.

A business plan isn’t a homework assignment to complete and forget about. At the same time, no one wants to get so bogged down in the details that they lose sight of day-to-day goals. 

But it should cover new opportunities and threats that a business owner surfaces, and incorporate feedback they get from customers. So it can’t be a static document.

For an entrepreneur at the ideation stage, writing and checking back on their business plan will help them determine if they can turn that idea into a profitable business .

And for owners of up-and-running businesses, updating the plan (or rewriting it) will help them respond to market shifts they wouldn’t be prepared for otherwise. 

It also lets them compare their forecasts and budgets to actual financial results. This invaluable process surfaces where a business might be out-performing expectations and where weak performance may require a prompt strategy change. 

The planning process is what uncovers those insights.

Related Reading: 10 prompts to help you write a business plan with AI

• How long should your business plan be?

Thinking about a business plan strictly in terms of page length can risk overlooking more important factors, like the level of detail or clarity in the plan. 

Not all of the plan consists of writing – there are also financial tables, graphs, and product illustrations to include.

But there are a few general rules to consider about a plan’s length:

• Your business plan shouldn’t take more than 15 minutes to skim.
• Business plans for internal use (not for a bank loan or outside investment) can be as short as 5 to 10 pages.

A good practice is to write your business plan to match the expectations of your audience. 

If you’re walking into a bank looking for a loan, your plan should match the formal, professional style that a loan officer would expect . But if you’re writing it for stakeholders on your own team—shorter and less formal (even just a few pages) could be the better way to go.

The length of your plan may also depend on the stage your business is in. 

For instance, a startup plan won’t have nearly as much financial information to include as a plan written for an established company will.

Read More: How long should your business plan be?  

What information is included in a business plan?

The contents of a plan business plan will vary depending on the industry the business is in. 

After all, someone opening a new restaurant will have different customers, inventory needs, and marketing tactics to consider than someone bringing a new medical device to the market. 

But there are some common elements that most business plans include:

• Executive summary: An overview of the business operation, strategy, and goals. The executive summary should be written last, despite being the first thing anyone will read.
• Products and services: A description of the solution that a business is bringing to the market, emphasizing how it solves the problem customers are facing.
• Market analysis: An examination of the demographic and psychographic attributes of likely customers, resulting in the profile of an ideal customer for the business.
• Competitive analysis: Documenting the competitors a business will face in the market, and their strengths and weaknesses relative to those competitors.
• Marketing and sales plan: Summarizing a business’s tactics to position their product or service favorably in the market, attract customers, and generate revenue.
• Operational plan: Detailing the requirements to run the business day-to-day, including staffing, equipment, inventory, and facility needs.
• Organization and management structure: A listing of the departments and position breakdown of the business, as well as descriptions of the backgrounds and qualifications of the leadership team.
• Key milestones: Laying out the key dates that a business is projected to reach certain milestones , such as revenue, break-even, or customer acquisition goals.
• Financial plan: Balance sheets, cash flow forecast , and sales and expense forecasts with forward-looking financial projections, listing assumptions and potential risks that could affect the accuracy of the plan.
• Appendix: All of the supporting information that doesn’t fit into specific sections of the business plan, such as data and charts.

Read More: Use this business plan outline to organize your plan

• Different types of business plans

A business plan isn’t a one-size-fits-all document. There are numerous ways to create an effective business plan that fits entrepreneurs’ or established business owners’ needs. 

Here are a few of the most common types of business plans for small businesses:

• One-page plan : Outlining all of the most important information about a business into an adaptable one-page plan.
• Growth plan : An ongoing business management plan that ensures business tactics and strategies are aligned as a business scales up.
• Internal plan : A shorter version of a full business plan to be shared with internal stakeholders – ideal for established companies considering strategic shifts.

Business plan vs. operational plan vs. strategic plan

• What questions are you trying to answer? 
• Are you trying to lay out a plan for the actual running of your business?
• Is your focus on how you will meet short or long-term goals? 

Since your objective will ultimately inform your plan, you need to know what you’re trying to accomplish before you start writing.

While a business plan provides the foundation for a business, other types of plans support this guiding document.

An operational plan sets short-term goals for the business by laying out where it plans to focus energy and investments and when it plans to hit key milestones.

Then there is the strategic plan , which examines longer-range opportunities for the business, and how to meet those larger goals over time.

Read More: How to use a business plan for strategic development and operations

• Business plan vs. business model

If a business plan describes the tactics an entrepreneur will use to succeed in the market, then the business model represents how they will make money. 

The difference may seem subtle, but it’s important. 

Think of a business plan as the roadmap for how to exploit market opportunities and reach a state of sustainable growth. By contrast, the business model lays out how a business will operate and what it will look like once it has reached that growth phase.

Learn More: The differences between a business model and business plan

• Moving from idea to business plan

Now that you understand what a business plan is, the next step is to start writing your business plan . 

The best way to start is by reviewing examples and downloading a business plan template. These resources will provide you with guidance and inspiration to help you write a plan.

We recommend starting with a simple one-page plan ; it streamlines the planning process and helps you organize your ideas. However, if one page doesn’t fit your needs, there are plenty of other great templates available that will put you well on your way to writing a useful business plan.

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Tim Berry is the founder and chairman of Palo Alto Software , a co-founder of Borland International, and a recognized expert in business planning. He has an MBA from Stanford and degrees with honors from the University of Oregon and the University of Notre Dame. Today, Tim dedicates most of his time to blogging, teaching and evangelizing for business planning.

Table of Contents

• Reasons to write a business plan
• Business planning research
• When to write a business plan
• When to update a business plan
• Information to include
• Business vs. operational vs. strategic plans

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Business Plan Definition & How to Write

A business plan is a key element for the success of your business.

You may be setting up a new business, looking for investors , or just refreshing your existing business. Either way, your business plan is critical. 

Writing a business plan is no easy feat. There is a large amount of hard work and dedication that goes into creating a comprehensive plan. After all, this plan is the foundation on which your business will be built or adapted. 

Many business founders find value in taking the time to hone in on their business idea. This includes a thorough look into your chosen market and trying to get into the minds of your potential audience. They are also a great way to set long-term goals to grow and sustain your business.

But what exactly is a business plan? 

We’ll take a closer look at the ins and outs of a business plan. We’ll also give you an easy to follow, 10-step program towards writing your own business plan.

KEY TAKEAWAYS

• A business plan is a written document that outlines your company’s key activities. It also outlines your objectives and how you plan to achieve your goals. 
• Business plans are often used by startup businesses. They can help get the business off the ground and attract potential investors. 
• A plan can also be used by an existing business to set long-term goals.

What Is a Business Plan?

A business plan is an essential document. It helps to provide an in-depth description and a clear overview of how you see your business developing and growing. It can be seen as your business’s mission statement, or its road map to success.

There is no hard and fast rule that says you have to write a business plan. However, there is a huge amount of value that can be taken from making one. There are also some entities that may not accept a proposal without a business plan. This includes banks and venture capital firms. 

A business plan can be used to explain your business strategy and your key goals. It can be used to clearly outline your path on how you expect to get from where your business is now, to where you want it to be in the future. 

A good business plan should be able to answer these four critical questions:

• How will you make your business profitable? 
• How do you plan to expand and increase your assets?
• What are your plans for growth?
• Where do you see your business in one, three and five years from now?

What Is a Business Plan Useful For?

At its most basic level, a business plan is used so that you can map out your business and the steps you need to take to realize your idea. 

A business plan can be used for far more things than a simple step by step guide. They can also be used to attract investors, talented employees and even potential business partners. Most banks and lenders will also require a detailed business plan in order to greenlight any loans. So having an in-depth plan is a vital way to support and fund your business.

Business plans are a very useful way for potential investors to evaluate the feasibility of a business before helping fund it. 

Even though this is often the case, some people think a business plan is only useful as a way to secure funding. It can be seen as a pitch full of fantasies, unrealistically high profit margins and crazy financial projections. 

However, a business plan is as much to do with convincing yourself of your business as it is with other people.

No matter what type of business you intend to make, a thorough, well-thought-out business plan is key. It can help you identify and lock down your business strategy and tackle potential problems. It’s also useful to plan out what you’ll need financially and check the viability of your idea.

It’s essentially a way of showcasing your business in a way that shows that you’ve put a lot of consideration into it. It can show that you have identified a gap in the market that you believe you can fill.

How to Write a Business Plan

There is no one-size-fits-all way to write a business plan. No two business plans will be the same, even if they are within the same industry. However, there is a recognized and often used business plan format. This utilizes the same elements for writing traditional business plans. 

Here are the 10 steps that we feel are the most important to follow: 

1. Executive Summary

The executive summary should always be at the beginning of your business plan.

Its purpose is to concisely and clearly summarize everything contained within your business plan. It’s essentially putting the conclusion at the start. 

This is done to give the reader a clear idea of what the business plan will entail. It is therefore perhaps the most important section of your plan. If the summary doesn’t hook the reader, then the chances are that they won’t continue reading. 

The executive summary should be detailed, interesting, and should be no longer than a page in length. It should be succinct, snappy, and leave the reader wanting to read on. 

2. Company Description

The next section of your plan should be the company description. 

As per the name, this is where you give a detailed description of your company.

You should answer questions such as:

• Who are you?
• What are your goals?
• What makes your business unique? 

It’s important to remember that during the early stages of a business, a potential investor will be investing in the owner as much as the idea. They will want to invest in someone who clearly shows a passion for what they’re doing, and with the business knowledge to back it up. 

This section can also help you to develop your business’s identity. Having a strong identity helps ground you and your business and goes a long way towards building your brand. 

3. Market Analysis

The process of analyzing your market is key. 

One of the most common reasons that a new business fails to succeed is because the owner neglected to analyze their market. 

A business without customers is useless. Therefore your product needs to match your audience because your audience will make or break you. That’s why it’s vital that you research, then lay out the expected consumer demand for what your business is selling. 

Your market analysis will also outline your potential competitors. As well as how your business factors within the industry. You can lay out their strengths and weaknesses, and then describe how you will fit into this market. As well as describe how easy or difficult it may be to take a share of the market. 

4. Management and Organization

If you are starting a medium or large-sized business, then the chances are that you will not be the only person working for the business. 

This section is where you will introduce the team that you have around you or the team that you plan to assemble. It’s good to have a strong team of entrepreneurs that have experience in the market. As this can give great confidence to potential investors. 

You can include their skill sets and the roles and responsibilities of each team member. It’s also good practice to communicate how you believe each member involved will contribute to the success of your business. 

You may be starting out as a solo entrepreneur and won’t have a team behind you. If that is the case, then you can use this section to lay out how you plan on managing each of the roles that your business requires. Whether that’s utilizing freelancers or taking on all aspects yourself. 

You may also want to show if you have plans on eventually bringing in staff once you are settled and have the capabilities to expand. 

5. Products and Services

This section is the ideal place to go into more depth and detail about your products and services. It is important to note that this shouldn’t be the first time that you are mentioning your product, but this is merely the opportunity to expand. 

If your business has a wide array of products or services, then you don’t need to go into great detail about all of them. It is acceptable to give a general overview, then pick out two or three products that you believe will be your best sellers. 

If your business is only focusing on a small number of products, then you can provide as much detail on each as you feel is necessary. While making sure to convey their worth and value. 

Remember to highlight what makes your products or services unique. Examples may include them being environmentally friendly or handmade. Or perhaps providing something your competitors aren’t. 

6. Customer Segmentation

Customer segmentation is the process of highlighting the exact audience you’ll be targeting. Known as your ‘target market’, this is a cornerstone of your business plan. 

Most business plans will create an ‘ideal customer’. This is a rough description of what your typical customer may be. You can describe their age, sex and level of education among other details. 

This shows that you have researched and understand your target market. 

7. Marketing Plan

Once you’ve laid out who your target market is, then you need to show how you plan on reaching them. 

This section of your plan is used to convey your proposed marketing strategy. It describes how the business will attract and retain a customer base and shows the outline of a clear distribution channel. 

This section will also spell out your marketing strategy and advertising campaign plans. As well as highlighting which media will be used to target the audience. 

8. Logistics and Operational Plan

The logistics and operations section should be packed with detail. This is because this section will show whether or not your idea can become a reality. 

Your logistics and operational plan should showcase who your suppliers will be. As well as detail the overall production process. So if you’re creating a product, you’ll want to include who will be supplying the ingredients and what the process of creation will be. 

This is also the section where you should show what your facilities are, or whether you need a physical location. You can also show what equipment you’ll be needing, your shipping process, and how you plan on housing your inventory. 

It is good practice to show that you have thought of a number of contingency plans in your operating plan. This will show that you can cover any number of potential problems or setbacks that may occur over the course of operations. 

9. Financial Plan

Your financial plan is one of the most vital parts of any business plan.

Even if all other sections of your business plan are perfect – if your financial projections don’t add up then no investor will take it seriously. 

This is where you will include your financial statements. Such as a balance sheet and a cash flow statement. You can also include an income statement and other financial information. New business owners will need to include targets and estimates for the first number of years of the business. 

Running out of funds is one of the most common reasons that a new or existing business will fail. This is mainly down to poor cash flow management.

Therefore, it’s vital that you show a clear and detailed understanding of your financial situation. It’s also important to be realistic about your business’s future, and not add unlikely projections. While you may not have to provide exact figures, you should be able to create a range of numbers, with a best and worst-case scenario laid out. 

If you are writing your business plan for a potential investor, then this is the section where you should outline your funding request. This request should involve a section where you outline how and when you will generate enough profit to start repaying the loan. As well as any cost savings that you can incorporate. 

10. The Appendices

If needed, the final stage of your business plan should be compiling a well-organized appendix. This should include any documents needed for the reader to conduct any due diligence. 

Your appendices can include things such as: 

• Patents and intellectual properties
• Deeds, local permits and legal documents
• Business registries and professional licenses 
• Industry associations and memberships 
• Key customer contracts and purchase orders

5 Best Business Plan Templates

The business world is a tough place to get a foothold in. It’s full of enterprising, ambitious businesses looking to corner their target market.

In such a competitive world, you have to make sure your business is finely tuned and ready to be scrutinized. Therefore, it needs to be thoroughly researched, finely detailed plans that are full of enthusiasm and skill. 

When it comes to writing a business plan, it can all seem quite daunting. That’s why there are so many templates for traditional business plans out there to help you along the way. 

We’ll take a look at the 5 best business plan consultant templates available so you can start your business with confidence and on the right foot. 

1. FreshBooks

FreshBooks offers a free template that is packed full of details and information. 

They take you through each section of the plan and what it should involve and what it should look like. 

As far as attention to detail goes, FreshBooks has you covered. Each section comes with a detailed description of what you can include in an easy-to-read and easy to understand way. 

Their website also included a huge amount of information and advice about business plans. They go through why they are important, how to make yours stand out and include some expert business tips. 

HubSpot offers a free one-page plan that is perfect for a business of any size. 

This one-page plan gives you a framework for how to build your business and your brand. It includes fields such as company description, required funding and a timeline of when you want to achieve certain goals.

The only issue is that as it is only a one-page plan, there isn’t room to go into full detail. This may work for someone who has a rough business idea, but it may be lacking for someone with a lot of pertinent details. 

BPlan offers a great free business plan template that concentrates on the financial side of things. 

The majority of small business owners that go out of business within the first three years tend to go under due to financial reasons. So by putting a huge amount of effort and details into your finances early on is a smart move. 

After filling out BPlans template, you will certainly have a much better understanding of your business’s financial plans. This will then help you take the right steps to maintain or improve it. 

4. PandaDoc

PandaDoc is a hugely popular software company that offers SaaS software. They tend to be known for their eSigning tools but they also offer a number of templates. 

Their business plan writing services are quite basic in its design. But it is packed full of tips, information and easy-to-understand content. 

What’s great about PandaDocs templates is that they have a number of custom business plans. These are specifically geared towards certain businesses. For example, they have everything from a Bakery Template to their Salon Template. 

Plum has gone down the route of showing their idea of a perfect business plan that you can follow along with. So instead of just supplying you with a template, they’ve given you their business plan for you to emulate. 

It’s a fantastic representation of a visually appealing business plan that blends design with content. 

You can see how they tell the story of their business model in a well-put-together, successful business plan.

There are a number of reasons as to why you should write a business plan. But one of the main reasons is so that you can start your business on a strong foundation.

Many small businesses fail within their first five years. This could be due to mismanaged finances or targeting the wrong market. It may be a lack of research, or even entering an industry that you don’t have an in-depth knowledge of.

But while these are all legitimate reasons, almost all of these can be solved by starting out with a solid business plan. 

As they say, if you fail to prepare – prepare to fail.

Business Plans FAQs

The length of a business plan will vary from business-to-business. While you will want to give as much detail as possible, you also need it to be concise. A document that is too long may deter the reader from getting to the end.

There may be elements to your business plan that you deem crucial, but you’re struggling to find the space for. For example applications for patents. In this case, they can be referenced in the main body and then included as appendices.

Operating a business without a structured plan isn’t recommended. There are very few examples of a successful business that didn’t start with a strong and detailed business plan.

Without a business plan, you may struggle to attract investors or secure a loan. You may also put too much money into ideas without giving them enough consideration.

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Business Plan Roadmap: Building Your Path to Business Success

Published: 31 December, 2023

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Table of Contents

In today’s fast-paced entrepreneurial landscape, a meticulously crafted business plan functions as the guiding star for your venture’s journey toward success. Whether you’re an experienced entrepreneur or a budding startup creator, possessing a comprehensive business plan is indispensable, serving as the key to securing funding, making well-informed decisions, and effectively navigating the ever-evolving business environment.

A skillfully developed business plan serves as the cornerstone of a prosperous venture, seamlessly aligning with crucial elements such as the Business Model Canvas and adapting to the ever-changing business environment . At Digital Leadership, we understand the importance of these strategic foundations, which is why we offer comprehensive Digital Strategy Consulting and Business Model Strategy services, to help businesses not only survive but thrive in today’s competitive landscape.

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Within the confines of this article, we will embark on a comprehensive exploration of the art of crafting an engaging and impactful business plan . We shall dissect critical components, including in-depth market research, meticulous financial projections, savvy marketing strategies, and effective operational blueprints. Additionally, we will unveil a plethora of tips and best practices designed to elevate your business plan above the competition, rendering it a value proposition for those seeking to invest in or collaborate with your enterprise.

What is a Business Plan

A business plan definition is a written document that outlines the goals, strategies, and detailed operational and financial plans of a business. It serves as a roadmap for the business, providing a clear direction for its growth and development. A typical business plan includes information about the company’s mission and vision, its products or services, market analysis, competition, target audience, marketing and sales strategies, organizational structure, financial projections, and funding requirements. Business plans are commonly used to secure funding from investors or lenders, guide the company’s operations, and communicate its vision and strategy to stakeholders.

A conventional business plan typically divides into two primary segments:

• The Explanatory Segment: This portion encompasses written content that serves the business purpose of providing a detailed description of the business idea and/or the company. It covers elements such as the executive summary, company overview, market analysis, product or service particulars, marketing and sales strategies, organizational structure, operational blueprints, and funding needs.
• The Financial Segment: Within this section, you’ll discover financial data and projections, encompassing income statements, balance sheets, cash flow forecasts, and detailed information regarding financing prerequisites and potential sources. This segment offers a quantitative view of the business’s financial situation and future expectations.

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Components of a Business Plan: What is Included in a Business Plan

Crafting a thorough and compelling business plan is a fundamental step for entrepreneurs and business leaders seeking to chart a successful course for their ventures. A well-structured business plan not only serves as a roadmap for your business’s growth but also communicates your vision, strategy, and potential to investors, partners, and stakeholders. The key components of a business plan make up a robust business plan, offering valuable insights and practical tips to help you create a document that inspires confidence and aligns your team with a shared vision. Each key element plays a critical role in constructing a business plan that not only secures financial support but also guides your organization toward sustainable success. Let’s delve deeper into these components, adding depth and clarity to your business plan ‘s narrative.

• Executive Summary: This should succinctly encapsulate the essence of your business plan . It should briefly touch on the market opportunity, your unique value proposition, revenue projections, funding requirements, and the overarching goals of the business.
• Company Description: Elaborate on your company’s history, including significant milestones and achievements. Clearly define your mission, vision, and values, providing insight into what drives the company’s culture and decisions.
• Market Analysis: Delve into the market’s nuances by discussing not only its size but also its growth rate, trends, and dynamics. Highlight specific target market segments, customer personas, and pain points that your business aims to address. Include a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis to showcase your understanding of the competitive landscape.
• Products or Services: Offer a detailed explanation of your offerings, emphasizing their key features and benefits. Describe how these offerings fulfill specific customer needs or solve problems, and explain any proprietary technology or intellectual property.
• Marketing and Sales Strategy: Provide a comprehensive overview of your marketing and sales plans. Discuss your pricing strategy in depth, outlining how it aligns with market dynamics. Explain your distribution channels and marketing tactics, including digital and traditional methods.
• Organizational Structure: Present bios of key team members, underscoring their relevant experience, expertise, and roles within the organization. Include an organizational chart to illustrate reporting relationships and the structure’s scalability.
• Operational Plan: Go into detail about your daily operations, covering everything from production processes and supply chain management to facility requirements and technology utilization. Discuss quality control measures and scalability strategies.
• Financial Projections: Provide a thorough breakdown of financial forecasts, including monthly or quarterly projections for at least three to five years. Explain the assumptions behind these numbers, including factors such as market growth rates and pricing strategies. Highlight critical financial metrics like burn rate, customer acquisition costs, and return on investment.
• Funding Requirements: Specify the exact amount of capital you’re seeking, the purpose of the funds, and how the investment will be utilized to achieve specific milestones. Outline potential sources of funding, such as equity investment, loans, or grants. Clarify the expected terms and conditions.
• Appendix: In the appendix, include supplementary materials that reinforce your business plan’s credibility and depth. This can encompass market research reports, letters of intent, prototypes, patents, legal contracts, and any other relevant documentation that adds value to your case.

A masterfully designed business plan serves as the guiding star to steer you toward triumph. Enter our publication, “ How to Create Innovation “, deep within its pages, you’ll unearth a plethora of pioneering instruments and frameworks, including the influential Business Model Canvas , poised to not only amplify your comprehension but also arm you with the tools essential to craft an authoritative and highly potent business plan.

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Creating a business plan essential steps.

Creating a business plan is a crucial step in launching or growing a business. Here’s a step-by-step guide to help you create an effective business plan :

1- Draft an Executive Summary:

• Write a concise overview of your business, including the mission, vision, and goals.
• Summarize the business concept, target market, and unique value proposition.
• Keep it brief but compelling to grab the reader’s attention.

2- Compose a Business Description:

• Provide detailed information about your business, industry, and the problem or need your product/service addresses.
• Explain your mission, vision, and core values.
• Describe the legal structure of your business (e.g., sole proprietorship, LLC, corporation).

3- Conduct a Market Analysis:

• Conduct thorough market research to understand your industry, target market, and competitors.
• Define your target audience and demonstrate a clear understanding of market trends.
• Conduct a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats).

4- Outline Organization and Management:

• Outline the organizational structure of your business.
• Introduce key team members and their roles, highlighting their relevant experience.
• Provide an overview of your advisory board or external support.

5- Detail the Product or Service Line:

• Describe your products or services in detail.
• Highlight the features, benefits, and unique selling points.
• Explain how your offerings meet the needs of your target market.

6- Develop a Marketing and Sales Strategy:

• Develop a comprehensive marketing strategy to reach your target audience.
• Outline your sales process, distribution channels , and pricing strategy.
• Include a sales forecast and customer acquisition plan.

7- Specify Funding Request (if applicable):

• Specify the amount of funding you are seeking (if any) and how you plan to use it.
• Justify the funding request with clear financial projections and a solid business case.

8- Prepare Financial Projections:

• Prepare detailed financial statements, including income statements, balance sheets, and cash flow statements.
• Provide assumptions and methodologies used for financial forecasts.
• Demonstrate your business’s profitability and financial viability.

9- Include an Appendix:

• Include supplementary materials such as resumes, permits, contracts, market research, or any other relevant documents.
• Keep this section optional but use it to provide additional context.

10- Review and Revise:

• Review your business plan thoroughly for clarity, consistency, and completeness.
• Seek feedback from mentors, advisors, or potential investors.
• Revise the plan based on feedback and ensure it aligns with your business goals.

Remember, a business plan is a dynamic document that should be revisited and updated regularly to reflect changes in your business environment. It serves as a roadmap for your business and a valuable tool for communicating your vision to others.

Types of Business Plans

Startup business plan:.

A comprehensive document crafted by entrepreneurs to outline the vision, mission, target market, competition analysis, financial projections, and strategies for launching and operating a new business.

Feasibility Business Plan:

A plan designed to assess the viability of a business idea or project by analyzing market demand, potential challenges, financial feasibility, and overall sustainability before committing resources.

One-Page Business Plan:

A condensed version of a traditional business plan, focusing on key elements such as the business concept, target market, value proposition, marketing strategy, and financial projections—all presented on a single page.

What-If Business Plan:

A flexible and dynamic plan that explores various scenarios and outcomes based on changing factors or assumptions. It helps businesses anticipate challenges and adjust strategies accordingly.

Growth Business Plan:

Tailored for businesses aiming to expand, this plan outlines strategies for scaling operations, entering new markets, launching products or services, and includes financial projections to support growth initiatives.

Operations Business Plan:

Geared towards day-to-day activities, this plan details operational procedures, resource allocation, supply chain management, and other aspects essential for the smooth functioning of the business.

Strategic Business Plan:

A long-term plan outlining the organization’s mission, vision, core values, and strategic initiatives. It guides decision-making, sets priorities, and aligns the company toward achieving overarching objectives.

The purpose of a business plan

A business plan is not a static document with a limited shelf life; rather, it evolves alongside the company it represents. It serves as a dynamic tool that adapts to changing market conditions, emerging opportunities, and evolving strategic priorities. Here’s a closer look at its continuous relevance:

• Guiding the Business ( Business Concept/Business Idea and Strategy ) : A business plan serves as an internal guide that helps entrepreneurs and management teams set clear objectives, develop business strategies, and make informed decisions. It provides a framework for prioritizing tasks, allocating resources, and monitoring progress toward achieving business goals.
• Securing Financing: One of the primary reasons for creating a business plan is to secure financing from lenders, investors, or banks. A well-prepared plan presents a compelling case for why the business is a viable and profitable investment. It includes financial projections, market research, and a clear explanation of how the funds will be used to achieve growth.
• Attracting Investors: For startups and early-stage companies, attracting equity investors is often crucial for rapid growth. A comprehensive business plan not only showcases the business opportunity but also outlines how investors can potentially realize significant returns on their investment. It highlights the company’s unique value proposition and competitive advantage.
• Setting Goals and Objectives: Business plan s articulate both short-term and long-term objectives for the company. Specific, measurable, and time-bound goals are essential for motivating employees, aligning efforts, and tracking progress. Objectives can encompass revenue targets, market share goals, expansion plans, and more.
• Managing Operations: Business plans include detailed operational plans, covering aspects such as production processes, supply chain management, inventory control, quality assurance, and logistics. These operational details ensure that the business runs smoothly and efficiently.
• Market Analysis: Comprehensive market research within the business plan helps the company understand its target market, customer demographics, and competitive landscape. This knowledge enables the business to adapt to changing market conditions and identify opportunities for growth, product development, or market expansion.
• Communicating the Vision: A well-crafted business plan communicates the company’s mission, vision, and values to both internal and external stakeholders. This clarity fosters a shared sense of purpose among employees and resonates with customers and partners.
• Risk Management: Business plans identify potential risks and challenges that the company may encounter. By acknowledging these risks upfront, the plan can outline strategies for risk mitigation or contingency plans. This proactive approach helps the business better navigate unforeseen challenges.
• Measuring Progress: A business plan serves as a benchmark for assessing the company’s performance and growth. By comparing actual results to the plan’s projections, the business can identify areas where it is excelling and areas that require adjustment. Regularly measuring progress is crucial for making data-driven decisions.
• Exit Strategy: In some cases, especially for entrepreneurs and investors, a business plan includes an exit strategy. This strategy outlines how the business owners plan to realize their investment, whether through selling the company, going public, or transitioning leadership to others.
• Competitive Adaptation: In the face of a constantly changing competitive landscape, a well-maintained business plan allows a company to regularly assess its competitive position. It aids in identifying emerging competitors, market shifts, and areas where the business can gain a competitive edge.
• Performance Measurement: By providing a baseline for projected financials and key performance indicators (KPIs), a business plan becomes a tool for measuring actual performance against expectations. This ongoing evaluation enables the organization to identify strengths, weaknesses, and areas for improvement.
• Resource Allocation: As a company grows, it often requires additional resources such as capital, personnel, or technology. The business plan assists in rationalizing and justifying resource allocation decisions to support expansion or address operational challenges.
• Innovation and Adaptation: In today’s rapidly changing business environment, adaptation and innovation are essential. A business plan encourages a culture of adaptability by fostering discussions on new opportunities and strategies for staying ahead of industry trends.
• External Engagement: Externally, the business plan remains a valuable tool for engaging with investors, partners, lenders, and other stakeholders. It provides a transparent and comprehensive view of the company’s past performance and future potential.

Important External Tasks of a Business Plan

A business plan holds significance beyond its internal utility, as it acts as the company’s calling card in external contexts. Primarily, it serves as a persuasive tool for potential investors, bolstering the chances of securing essential financing, whether during startup or later stages for marketing initiatives or product development. Additionally, a well-crafted business plan proves valuable in negotiation discussions with potential key partners and regulatory bodies, enhancing the stability of current and future business relationships with customers and suppliers alike.

Here are some significant external tasks associated with a business plan:

• Securing Financial Support: One of the primary external objectives of a business plan is to attract external financing from investors or lenders. A well-prepared plan should clearly communicate the company’s financial requirements and how those funds will be utilized to achieve its objectives.
• Presenting to Investors: If you are seeking investment from angel investors, venture capitalists, or private equity firms, you must effectively present your business plan . This entails pitching your business to potential investors, highlighting key aspects of your plan, and addressing their inquiries and concerns.
• Applying for Financing or Grants: If you intend to secure loans or grants to fund your business, your business plan will be a crucial component of your application. It should demonstrate your capacity to repay loans or meet grant criteria, as well as how the funds will drive growth.
• Negotiating Partnerships and Collaborations: When pursuing partnerships, joint ventures, or alliances with other businesses, a business plan can outline the strategic advantages and potential outcomes of the collaboration. This is vital for persuading potential partners of the value of working together.
• Ensuring Regulatory Compliance: Depending on your industry and location, you may need to submit your business plan to regulatory agencies for approval or compliance. This is particularly common in sectors like healthcare, finance, and energy.
• Obtaining Licenses and Permits: If your business requires specific licenses or permits to operate, your business plan may be requested during the application process to demonstrate your readiness and compliance with regulations.
• Facilitating Mergers and Acquisitions: In mergers or acquisitions, both the acquiring and target companies may need to provide business plans to potential investors or lenders involved in the transaction. This aids in evaluating the financial viability and strategic fit of the merger or acquisition.
• Attracting Strategic Partners: In addition to traditional investors, you may seek to attract strategic partners who can offer resources, expertise, or distribution channels. You r business plan should compellingly illustrate why potential partners should collaborate with your company.
• Preparing for an IPO (Initial Public Offering): If your long-term strategy includes taking your company public, a comprehensive business plan is essential to attract public market investors. It must provide a detailed view of your company’s financial health, growth potential, and market position.
• Undergoing Due Diligence: When external parties consider investing in or partnering with your company, they often conduct due diligence. Your business plan should be precise and comprehensive to withstand scrutiny during this process.

When is a Business Plan Needed

When starting a new business, it makes sense to write a business plan . A strong business concept helps you find investors and convince big business figures, investors, or banks of your business idea.

In addition, a business plan forces a start-up to confront the strengths but also weaknesses of its business idea. However, an already existing company can equally benefit from a business plan. Many companies often lack a clearly recognizable strategy or guidelines against which success can be measured.

A business plan also leads to more transparency in entrepreneurial decisions and is necessary for an already existing company when raising outside capital and investors. An increasing number of investors and capital providers demand the submission of such a plan, thus making a strong business concept so important.

• Startup Phase : A business plan is essential when starting a new venture as it helps define your business concept, target market, and competitive strategy. It outlines your initial funding requirements, revenue projections, and expected milestones, providing a roadmap for the early stages of your business.
• Securing Financing : Whether you’re seeking a bank loan, angel investment, venture capital, or crowdfunding, a detailed business plan is a prerequisite. It should include financial forecasts, an analysis of your industry and competitors, and a clear description of how the funds will be used to grow the business.
• Strategic Planning : Regularly updating your business plan is crucial for strategic planning . It allows you to assess your company’s strengths, weaknesses, opportunities, and threats (SWOT analysis) and adjust your strategies accordingly. It provides a long-term vision and helps align the organization’s efforts toward common goals.
• New Product or Service Launch : Before launching a new offering, a business plan helps you research the market, understand underserved customer needs, and determine the product’s unique selling points. It outlines your marketing and sales strategy, pricing structure, and expected return on investment.
• Mergers and Acquisitions : In mergers and acquisitions (M&A) transactions, a business plan is used to evaluate the financial viability and strategic fit of the deal. It provides insights into the target company’s operations, revenue streams, and potential synergies with the acquiring company.
• Partnerships and Alliances : When exploring collaborations with other businesses, a business plan outlines the mutual benefits and objectives of the partnership. It clarifies roles and responsibilities, risk-sharing arrangements, and how the partnership aligns with each party’s strategic goals.
• Regulatory Compliance : Certain industries, like healthcare, finance, and energy, require businesses to submit comprehensive business plans to regulatory authorities. These plans demonstrate compliance with industry-specific regulations and provide transparency in operations.
• Licensing and Permits : When applying for licenses or permits, particularly in regulated industries such as food service, healthcare, or construction, a business plan may be necessary to prove that your operations meet safety, health, and environmental standards.
• IPO (Initial Public Offering) : Making a company public is a complex process. A thorough business plan is crucial to attract public investors. It should provide historical financial performance, future growth prospects, and a clear value proposition for potential shareholders.
• Crisis Management : In times of financial distress or operational challenges, businesses may develop a crisis management or turnaround plan. This specialized business plan outlines the steps needed to stabilize the company’s finances, restructure operations, and restore profitability.

Example of Business Plan Structure

Generally, there are no fixed guidelines as to how a business plan should be structured. Business concepts heavily depend on the recipient of the business plan and the orientation and structure of the company. The following bullet points are therefore only to be understood as basic building blocks that must be adapted to the individual situation.

1. Business Concept/Business Idea and Strategy:

• Illustrate your business concept, including the idea and methods for successful implementation.
• Include a timeline for implementing the concept.
• Optionally, provide information about your company and headquarters.

2. Company Description:

• Provide detailed information about your company, including its name, location, legal structure, and history.
• Explain your business’s purpose and the problems it aims to solve.
• Describe your target market and your business’s role within it.

3. Target Market:

• Market volume and potential.
• Growth potential.
• Barriers to entry and market restrictions.
• Supplier positioning.
• Relevant laws and regulations.
• Competitor analysis (strengths, weaknesses, product range).
• Identifying potential customers.

4- Operational Plan:

• Describe your business’s day-to-day operations, including location, facilities, equipment, and technology.
• Explain your supply chain, production processes, and quality control.
• Address any regulatory or compliance requirements.

5. Products and Services:

• Describe your products or services, highlighting how they differentiate from competitors.
• Unique Selling Proposition.
• Customer Benefits.
• Competitive Advantages.
• Innovation or optimization of existing products.
• Patent or property rights.

6. Marketing and Sales Planning:

• Outline your marketing strategy and timetable.
• Specify market entry plans.
• Set company goals related to market leadership, market share, revenue, and brand awareness.
• Discuss sales policy, pricing policy, and communication policy & advertising.
• Address sales methods, future developments, and pricing strategy justification.

7. Management, Employees, and Organization:

• Highlight management skills, qualifications, and key team members.
• Emphasize industry knowledge, social skills, previous successes, and professional experience.
• Mention personnel development strategies.
• Describe the organizational structure, focusing on procurement, development, production, sales, and administration.

8. Opportunities and Risks:

• In the ‘Opportunities’ section, showcase the potential of your business idea and the conditions for exploiting that potential.
• Address risks comprehensively, demonstrating a detailed and critical approach.
• Include potential risk scenarios and proposed solutions.

9. Financial Planning:

• Present concrete financial figures derived from previous analyses and plans.
• Profit Planning: Include a profit and loss statement (P&L).
• Balance Sheet: Provide an overview of assets, liabilities, and equity.
• Liquidity Plan: Compare expenditures with available funds.

10. Appendix:

• Include necessary documents like commercial register excerpts, business registrations, shareholder agreements, and legal forms.
• Attach CVs and references of key team members.
• Include relevant financial spreadsheets, patents, permits, licenses, brochures, leaflets, and organizational charts or graphs.

Reasons for Business Plan Failures

• Lack of Market Research: Failing to thoroughly understand the target market and its needs can lead to products or services that don’t resonate with customers.
• Inflexibility: A rigid plan that doesn’t adapt to changing market conditions or feedback from customers can become obsolete quickly.
• Overly Optimistic Projections: Unrealistic financial projections can mislead investors and hinder the business’s ability to meet expectations.
• Poor Execution: Even the best plan will fail without proper execution. A lack of skilled team members, resources, or a clear execution strategy can doom a business.
• Ignoring Competition: Ignoring or underestimating competitors can lead to a business being unprepared for market competition.
• Insufficient Funding: Underestimating the capital required to launch and sustain the business can lead to financial troubles.
• Inadequate Marketing: Without effective marketing, even great products or services may go unnoticed by potential customers.
• Ignoring Customer Feedback: Not listening to customer feedback and adjusting the business accordingly can result in products or services that don’t meet market needs.

Connecting The Dots: Importance of Business Model Canvas in Business Plan

Integrating the Business Model Canvas (BMC) into a traditional business plan is a pivotal process in crafting a comprehensive and highly effective business strategy . The Business Model Canvas , with its visual and succinct approach, offers a distinctive viewpoint on your business model. It functions as a complementary tool to the in-depth components of a traditional plan, strengthening your strategic capabilities. You can download it now.

The synergy between these two strategic instruments not only facilitates communication but also empowers you to analyze and adjust your business strategy with precision, ultimately fostering a pathway to success. In the following discussion, we delve into the significance of bridging the gap between these two potent tools within the domain of business planning. Here’s why the Business Model Canvas is essential within the context of a business plan:

• Visual Representation: The Business Model Canvas provides a visual framework that allows you to quickly grasp and convey the fundamental elements of your business model. This visual clarity is especially valuable when presenting your business concept to potential investors, partners, or team members.
• Concise Overview: While a traditional business plan can be lengthy and detailed, the BMC offers a concise summary of key components, including customer segments, value propositions, channels, revenue streams, and cost structures . It distills complex business concepts into a simplified format, making it easier to communicate and understand.
• Iterative Planning: The BMC encourages an iterative approach to business strategic planning . It enables you to experiment with different business model hypotheses and make adjustments as you gather feedback and insights. This agility is vital, especially for startups and businesses in rapidly evolving markets.
• Focus on Value: The Business Model Canvas places a strong emphasis on understanding customer needs and value creation . It prompts you to identify your unique value propositions and how they address customer pain points, aligning your strategy with customer-centric principles.
• Holistic View: By using the BMC, you’re prompted to consider all aspects of your business model, from customer acquisition to revenue generation and cost management. This holistic perspective helps identify potential gaps, dependencies, and opportunities that might be overlooked in a traditional plan.
• Alignment and Coordination: The BMC fosters alignment among team members and stakeholders. It’s a collaborative tool that encourages discussions about the business model, ensuring that everyone shares a common understanding and vision. This alignment is critical for execution.
• Integration with Traditional Plan: While the BMC is an excellent starting point, it can be seamlessly integrated into a traditional business plan. The insights and clarity gained from the BMC can inform and enrich the sections of the plan related to products/services, target market, marketing strategy, and financial projections.
• Efficiency: The BMC saves time and resources, particularly in the early stages of planning when you’re exploring different business model scenarios. It allows you to focus on the most critical aspects of your strategy before diving into the details.
• Adaptability: In a rapidly changing business environment, having a flexible and adaptable business model is essential. The BMC’s modular structure makes it easier to pivot or adapt your strategy in response to market shifts, competitive pressures, or emerging opportunities.

In summary, a business plan is a multifaceted and indispensable tool for businesses at every stage of their journey. It serves as a compass, guiding strategic decisions, securing essential financing, and attracting potential investors. Its ongoing relevance is a testament to its adaptability, enabling businesses to measure performance, allocate resources, and manage risks effectively. Beyond its practical utility, a business plan is a communication tool, conveying a company’s vision and objectives to both internal teams and external stakeholders. It is a dynamic and ever-evolving document that empowers businesses to navigate uncertainties, foster innovation, and drive sustainable growth, making it an indispensable companion in the pursuit of business success.

Frequently Asked Questions

1- how does a business plan relate to usiness strategy.

A business plan is closely intertwined with a company’s business strategy. The plan lays out the specific actions and tactics required to achieve the strategic goals of the business. It provides a roadmap for implementing the chosen strategy, outlining how resources will be allocated, what markets will be targeted, and how the business will position itself in the competitive landscape.

2- Is a business plan necessary if I already have a solid business strategy?

Yes, a business plan is still essential, even if you have a well-defined strategy. It serves as the detailed execution plan for your strategy, providing clarity on how you will achieve your strategic objectives. It also helps you anticipate challenges, manage risks, and secure financing or investments by demonstrating the viability of your strategy.

3- Can I use the Business Model Canvas in place of a business plan for a startup?

While the Business Model Canvas is an excellent tool for conceptualizing and validating your business model, it is often not a substitute for a comprehensive business plan , especially when seeking financing or investments. Startups may begin with Canvas to clarify their model but should eventually develop a full business plan to provide in-depth financial projections, market analysis, and operational details.

4- How often should I update my business plan to align with my evolving strategy?

It’s advisable to review and update your business plan regularly, typically at least once a year. However, major changes in your business environment, such as shifts in market conditions or strategic pivots, may require more frequent updates. Keeping your plan current ensures it remains a relevant and effective tool for guiding your business.

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Group Health Insurance: What It Is, How It Works, Benefits

Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia.

Thomas J Catalano is a CFP and Registered Investment Adviser with the state of South Carolina, where he launched his own financial advisory firm in 2018. Thomas' experience gives him expertise in a variety of areas including investments, retirement, insurance, and financial planning.

What Is a Group Health Insurance Plan?

Group Insurance health plans provide coverage to a group of members, usually comprised of company employees or members of an organization. Group health members usually receive insurance at a reduced cost because the insurer’s risk is spread across a group of policyholders. There are plans such as these in both the U.S. and Canada .

Key Takeaways

• Group members receive insurance at a reduced cost because the insurer’s risk is spread across a group of policyholders.
• Plans usually require at least 70% participation in the plan to be valid. 
• Premiums are split between the organization and its members, and coverage may be extended to members' families and/or other dependents for an extra cost.
• Employers can enjoy favorable tax benefits for offering group health insurance to their employees.

Group health insurance plans are purchased by companies and organizations and then offered to their members or employees. Plans can only be purchased by groups, which means individuals cannot purchase coverage through these plans. Plans usually require at least 70% participation in the plan to be valid. Because of the many differences—insurers, plan types, costs, and terms and conditions—between plans, no two are ever the same.

Group plans cannot be purchased by individuals and typically require at least 70% participation by group members.

Once the organization chooses a plan, group members are given the option to accept or decline coverage. In certain areas, plans may come in tiers, where insured parties have the option of taking basic coverage or advanced insurance with add-ons. The premiums are split between the organization and its members based on the plan. Health insurance coverage may also be extended to the immediate family and/or other dependents of group members for an extra cost.

The cost of group health insurance is usually much lower than individual plans because the risk is spread across a higher number of people. Simply put, this type of insurance is cheaper and more affordable than individual plans available on the market because more people buy into the plan.

The earliest known example of group coverage for health services dates to 1798, when Congress established the U.S. Marine Hospital for Navy seamen. Participation was compulsory, with deductions coming from salaries. Other examples include the mining, lumber, and railroad industries in the late 1800s, which had a vested interest in ensuring the health of its workers.

Montgomery Ward is credited with establishing the nation’s first group health insurance policy in 1910. The policy did not reimburse workers for medical expenses, but provided cash payments to workers equal to half their wages in the event of injury or illness.

The progressive political movement of the early 1900s led to several proposals to establish compulsory national health insurance. However, these proposals failed to counter opposition from doctors, who objected to uniform fee structures; labor groups, which felt their power would be weakened; and insurance companies, which feared encroachment on their business.

Employer-sponsored group health insurance grew rapidly in the 1940s as a way for employers to get around wage controls set during World War II. In 1943, the War Labor Board introduced wage caps but did not include insurance premiums as part of the cap. As such, employers were free to offer health insurance to attract and retain workers, resulting in a tripling of health insurance coverage by the end of the war.

But this failed to address the needs of retirees and other non-working adults. Federal efforts to provide coverage to those groups led to the Social Security Amendments of 1965, which laid the foundation for Medicare and Medicaid .

Benefits of a Group Health Insurance Plan

The primary advantage of a group plan is that it spreads risk across a pool of insured individuals. This benefits the group members by keeping premiums low, and insurers can better manage risk when they have a clearer idea of who they are covering. Insurers can exert even greater control over costs through health maintenance organizations (HMOs), in which providers contract with insurers to provide care to members.

The HMO model tends to keep costs low, at the cost of restrictions on the flexibility of care afforded to individuals. Preferred provider organizations (PPOs) offer the patient a greater choice of doctors and easier access to specialists but tend to charge higher premiums than HMOs.

The percent of the U.S. population covered by employer-provided group health insurance in 2021.

The vast majority of group health insurance plans are employer-sponsored benefit plans. It is possible, however, to purchase group coverage through an association or other organizations. Examples of such plans include those offered by the American Association of Retired Persons (AARP), the Freelancers Union, and wholesale membership clubs.

Not everyone is covered by a group health insurance plan. For many decades, these uninsured people were forced to bear the cost of healthcare on their own. But that has changed.

Government-sponsored health plans are an option for those left out of employer-sponsored group health insurance. The Affordable Care Act (ACA) adopted in 2010 created a marketplace for health insurance that provides coverage to 16.3 million people as of the 2022-2023 open enrollment season.

After the passage of the ACA, taxpayers were required to show they had health insurance coverage or qualified for an exemption, or else they were required to pay a penalty described as a “shared responsibility payment.” This mandated payment was eliminated with the passage of the Tax Cuts and Jobs Act beginning in the 2019 tax year.

United Healthcare, a division of UnitedHealth Group (UHC), is one of the nation's largest health insurers. It offers a buffet of group health insurance options for all types of businesses. Include are medical plans and specialty, supplemental plans, such as dental, vision, and pharmacy.

United Healthcare offers plans under the federally-sponsored Small Business Health Options (SHOP) program, a provision of the Affordable Care Act. In most states, employers must have 50 or fewer full-time employees, although some states allow for as many as 100 employees. Businesses that pay at least 50% of the insurance premium qualify for a 50% tax credit.

Midsize businesses, with between 51 and 2,999 employees, have various options available, including bundles. Large businesses, with 3,000 or more employees, qualify as national accounts, which have more services and healthcare features, including the ability to customize plan offerings.

What Is a Group Health Plan?

Group health plans are employer- or group-sponsored plans that provide healthcare to members and their families. The most common type of group health plan is group health insurance, which is health insurance extended to members, such as employees of a company or members of an organization.

What Is a Group Health Cooperative?

A group health cooperative, also known as mutual insurance, is a health insurance plan owned by the insured members . Insurance is offered at a reduced cost, and what they collect from members is based on claims paid. The cost of care is spread out across the insured population.

How Many Employees Do You Need to Qualify for Group Health Insurance?

Many group health insurers offer plans to companies with one or more employees. The type of plans available, however, may vary according to the size of the business . For example, United Healthcare provides various plans for small businesses with 1-50 employees , midsize businesses with 51-2,999, and large employers with 3,000 or more employees.

What Are Group Health Insurance Benefits?

Group health insurance plans offer medical coverage to members of an organization or employees of a company. They may also provide supplemental health plans—such as dental, vision, and pharmacy—separately or as a bundle. Risk is spread across the insured population, which allows the insurer to charge low premiums. And members enjoy low-cost insurance, which protects them from unexpected costs arising from medical events.

How Much Does Group Health Insurance Cost?

The average group health insurance policy costs roughly $7,400 annually for an individual, with the employee paying 17% of the premium. For family coverage, the average cost was about $21,000 per year, with the employee paying 27% of the premium.

Group health insurance plans are one of the most affordable types of health insurance plans available. Because risk is spread among insured persons, premiums are considerably lower than traditional individual health insurance plans. This is possible because the insurer assumes less risk as more people participate in the plan. For employees who ordinarily would not be able to afford individual health insurance, it is an attractive benefit.

U.S. Bureau of Labor Statistics, Monthly Labor Review. “ The Development and Growth of Employer-Provided Health Insurance ,” Pages 3-4.

Marilyn J. Field and Harold T. Shapiro. “ Employment and Health Benefits: A Connection at Risk ,” Chapter 2.

National Archives. “ Medicare and Medicaid Act (1965) .”

Kaiser Family Foundation. " Health Insurance Coverage for the Total Population ."

U.S. Department of Health and Human Services. “ Biden-Harris Administration Announces Record-Breaking 16.3 Million People Signed Up for Health Care Coverage in ACA Marketplaces During 2022-2023 Open Enrollment Season .”

Internal Revenue Service. “ Individual Shared Responsibility Provision .”

United HealthCare Services. “ Small Business Health Options Program (SHOP) .”

Kaiser Family Foundation. “ 2020 Employer Health Benefits Survey .”

• Health Insurance: Definition, How It Works 1 of 30
• Group Health Insurance: What It Is, How It Works, Benefits 2 of 30
• Is Health Insurance Mandatory? 3 of 30
• Affordable Care Act (ACA): What It Is, Key Features, and Updates 4 of 30
• Choosing Bronze, Silver, Gold, or Platinum Health Plans 5 of 30
• Buying Private Health Insurance 6 of 30
• Health Maintenance Organization (HMO): What It Is, Pros and Cons 7 of 30
• Preferred Provider Organization (PPO): Definition and Benefits 8 of 30
• Point-of-Service (POS) Plan: Definition, Pros & Cons, Vs. HMO  9 of 30
• How High-Deductible Health Plans Work 10 of 30
• Coinsurance vs. Copays: What's the Difference? 11 of 30
• Co-pay vs. Deductible: What’s the Difference? 12 of 30
• Pre Existing Condition: How They Affect Your Health Insurance 13 of 30
• Health Insurance: Paying for Pre-Existing Conditions 14 of 30
• What Is a Gatekeeper? Definition in Healthcare and Examples 15 of 30
• How Much Does Health Insurance Cost? 16 of 30
• How to Cut Your Costs for Marketplace Health Insurance 17 of 30
• What Does Health Insurance Not Cover? 18 of 30
• How to Apply for Financial Assistance to Pay for Health Insurance 19 of 30
• Health Insurance Premium: Meaning, Overview, FAQ 20 of 30
• How to Calculate Insurance Premiums 21 of 30
• Are Health Insurance Premiums Tax-Deductible? 22 of 30
• Health Insurance Deductible: What It Is and How It Works 23 of 30
• Out-of-Pocket Expenses: Definition, How They Work, and Examples 24 of 30
• What Is an Out-of-Pocket Maximum? Definition and How It Works 25 of 30
• How to Get Health Insurance 26 of 30
• Best Health Insurance Companies 27 of 30
• How to Compare Health Insurance Plans: Aetna vs. Cigna 28 of 30
• The Truth About Saving on Healthcare Costs—Many Strategies Are Buyer Beware 29 of 30
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How to write a company description for a business plan

Table of Contents

What is a company description?

What to include in your company description , where , company description example, tips for getting your company description right , stay on top of your new business finances with countingup.

A business plan is essential to setting your business up for success and determining what you want it to look like. One major part of that business plan is the company description. But if you’re unsure how to write a company description for a business plan, we can help.  

This guide will cover how to write a company description for a business plan, including: 

• What a company description is 
• What to include in your company description (with example)
• Tips for getting your company description right

The company description is part of your business plan outlining what your business does and why. It touches on your market and products or services. But it also explains what differentiates you from similar companies.

On top of this, it outlines your company’s mission and vision. Your mission statement specifies your business’s values, ethics, goals, and overall culture. Meanwhile, your vision statement defines where you want your business to go in the future. 

Your business plan will guide you as you start your business, but it’s also essential to gaining external funding. So, the stronger and clearer your company description, the more prepared you’ll look. It shows that you have a detailed understanding of what you do and how you’ll earn money. 

Knowing how to write a company description for a business plan requires some key elements, which we’ll outline below. We’ll also give a brief company description example.  

Start by outlining who you are, including the owner and business name. On top of this, include your business’s market and target audience . You can gain this important knowledge through market research , which will help you understand demand, competition, and your customer base. 

You’ll also need to explain where you’ll run your business. For example, you may explain where you’ll open a shop and why that location will be beneficial. If you plan to run the business from home, discuss how this will work. 

Next, outline the products or services, what problems they’ll solve, and the demand of that market. Aside from what you’ll sell, discuss your short, medium, and long term goals . Clear goals show how you see your business growing over time. Be sure to make these goals realistic and achievable, with ways to measure their success. 

Also, provide an estimated opening date for your business. Then, create a timeline for when you’ll reach profitability . In addition to this, discuss the timeframe for your goals. You may also need to touch upon an exit strategy, such as when you plan to retire or potentially sell. 

Your company description should also clearly describe why you want to start this business. What gave you this idea, and what is your main motivation? Why should customers buy from you? What will you be able to offer them that other businesses can’t? 

Finally, summarise how you’ll operate your business and achieve your goals. How will you structure your business ? This section is crucial for detailing your operations and how you’ll solve potential challenges. So, try to be specific here to show you’ll make your business happen. 

Molly’s Muffins, founded by classically trained baker Molly Smith, aims to redefine the baking market by creating delicious gluten-free and healthy muffins. The shop will cater to a gluten-free audience and target a younger to middle-aged health-conscious demographic. 

Molly’s Muffins will sell in a shop with a fitted kitchen in the higher-income Marchmont neighbourhood of Edinburgh city centre, United Kingdom. The business will serve a variety of gluten-free muffins baked daily in the shop, low in fats and sugars. 

In the short term, Molly Muffin’s aims to develop a loyal customer base in the area and beyond through social media marketing, paid advertising and a rewards program. The medium-term goals of the business include developing an online shop and catering service. In the long term, the business plans to open further locations. 

Molly’s Muffins will register as a limited company to prepare for future growth. With a Bachelors in Bakery and Patisserie science and five years of experience working in and managing a bakery, Molly Smith is prepared to turn her muffin-making passion into a profitable business. 

Molly’s Muffins will open its doors in April of 2022, with a timeline of ten months to reach profitability. The business aims to reach short term goals in three months, medium-term goals in a year, and long term goals in five years. 

Mission statement : Molly’s Muffins mission is to normalise and improve the reputation of gluten-free and healthy food products by making them delicious for all. It prioritises kindness, equality, and a healthy lifestyle.

Now that you know how to write a company description for a business plan, make it clear, detailed, and brief. If your plan is vague, it will be difficult to convince investors of. But, a description with too much detail will be difficult to get through. A clear and grammatically correct description will look more professional.

After writing your company description, be sure to check and update it regularly as it needs to  change with your growing business.

As you start your small business, you’ll need to organise your finances for success. But financial management can be stressful and time-consuming when you run your own business. That’s why thousands of business owners use the Countingup app to make their financial admin easier. 

Countingup is the business current account with built-in accounting software that allows you to manage all your financial data in one place. With the app’s many features, you can better stick to and achieve your business plan. For example, the app generates cash flow insights and year-round tax estimates to avoid surprises and track your performance.  

Plus, with automatic expense categorisation and the receipt capture tools, you can stay on top of how much you spend for your business. The app will label each transaction with HMRC approved categories. It will also remind you to snap a picture of your receipt when you make a purchase. This will help you stick to your budget and maintain your bookkeeping to work towards success and profitability. 

Start your three-month free trial today. 

Find out more here .

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What is a business plan? Definition, Purpose, and Types

In the world of business, a well-thought-out plan is often the key to success. This plan, known as a business plan, is a comprehensive document that outlines a company’s goals, strategies , and financial projections. Whether you’re starting a new business or looking to expand an existing one, a business plan is an essential tool.

As a business plan writer and consultant , I’ve crafted over 15,000 plans for a diverse range of businesses. In this article, I’ll be sharing my wealth of experience about what a business plan is, its purpose, and the step-by-step process of creating one. By the end, you’ll have a thorough understanding of how to develop a robust business plan that can drive your business to success.

What is a business plan?

Purposes of a business plan, what are the essential components of a business plan, executive summary, business description or overview, product and price, competitive analysis, target market, marketing plan, financial plan, funding requirements, types of business plan, lean startup business plans, traditional business plans, how often should a business plan be reviewed and revised, what are the key elements of a lean startup business plan.

• What are some of the reasons why business plans don't succeed?

A business plan is a roadmap for your business. It outlines your goals, strategies, and how you plan to achieve them. It’s a living document that you can update as your business grows and changes.

Looking for someone to write a business plan?

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These are the following purpose of business plan:

• Attract investors and lenders: If you’re seeking funding for your business , a business plan is a must-have. Investors and lenders want to see that you have a clear plan for how you’ll use their money to grow your business and generate revenue.
• Get organized and stay on track: Writing a business plan forces you to think through all aspects of your business, from your target market to your marketing strategy. This can help you identify any potential challenges and opportunities early on, so you can develop a plan to address them.
• Make better decisions: A business plan can help you make better decisions about your business by providing you with a framework to evaluate different options. For example, if you’re considering launching a new product, your business plan can help you assess the potential market demand, costs, and profitability.

The executive summary is the most important part of your business plan, even though it’s the last one you’ll write. It’s the first section that potential investors or lenders will read, and it may be the only one they read. The executive summary sets the stage for the rest of the document by introducing your company’s mission or vision statement, value proposition, and long-term goals.

The business description section of your business plan should introduce your business to the reader in a compelling and concise way. It should include your business name, years in operation, key offerings, positioning statement, and core values (if applicable). You may also want to include a short history of your company.

In this section, the company should describe its products or services , including pricing, product lifespan, and unique benefits to the consumer. Other relevant information could include production and manufacturing processes, patents, and proprietary technology.

Every industry has competitors, even if your business is the first of its kind or has the majority of the market share. In the competitive analysis section of your business plan, you’ll objectively assess the industry landscape to understand your business’s competitive position. A SWOT analysis is a structured way to organize this section.

Your target market section explains the core customers of your business and why they are your ideal customers. It should include demographic, psychographic, behavioral, and geographic information about your target market.

Marketing plan describes how the company will attract and retain customers, including any planned advertising and marketing campaigns . It also describes how the company will distribute its products or services to consumers.

After outlining your goals, validating your business opportunity, and assessing the industry landscape, the team section of your business plan identifies who will be responsible for achieving your goals. Even if you don’t have your full team in place yet, investors will be impressed by your clear understanding of the roles that need to be filled.

In the financial plan section,established businesses should provide financial statements , balance sheets , and other financial data. New businesses should provide financial targets and estimates for the first few years, and may also request funding.

Since one goal of a business plan is to secure funding from investors , you should include the amount of funding you need, why you need it, and how long you need it for.

• Tip: Use bullet points and numbered lists to make your plan easy to read and scannable.

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Business plans can come in many different formats, but they are often divided into two main types: traditional and lean startup. The U.S. Small Business Administration (SBA) says that the traditional business plan is the more common of the two.

Lean startup business plans are short (as short as one page) and focus on the most important elements. They are easy to create, but companies may need to provide more information if requested by investors or lenders.

Traditional business plans are longer and more detailed than lean startup business plans, which makes them more time-consuming to create but more persuasive to potential investors. Lean startup business plans are shorter and less detailed, but companies should be prepared to provide more information if requested.

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A business plan should be reviewed and revised at least annually, or more often if the business is experiencing significant changes. This is because the business landscape is constantly changing, and your business plan needs to reflect those changes in order to remain relevant and effective.

Here are some specific situations in which you should review and revise your business plan:

• You have launched a new product or service line.
• You have entered a new market.
• You have experienced significant changes in your customer base or competitive landscape.
• You have made changes to your management team or organizational structure.
• You have raised new funding.

A lean startup business plan is a short and simple way for a company to explain its business, especially if it is new and does not have a lot of information yet. It can include sections on the company’s value proposition, major activities and advantages, resources, partnerships, customer segments, and revenue sources.

What are some of the reasons why business plans don't succeed?

• Unrealistic assumptions: Business plans are often based on assumptions about the market, the competition, and the company’s own capabilities. If these assumptions are unrealistic, the plan is doomed to fail.
• Lack of focus: A good business plan should be focused on a specific goal and how the company will achieve it. If the plan is too broad or tries to do too much, it is unlikely to be successful.
• Poor execution: Even the best business plan is useless if it is not executed properly. This means having the right team in place, the necessary resources, and the ability to adapt to changing circumstances.
• Unforeseen challenges:  Every business faces challenges that could not be predicted or planned for. These challenges can be anything from a natural disaster to a new competitor to a change in government regulations.

What are the benefits of having a business plan?

• It helps you to clarify your business goals and strategies.
• It can help you to attract investors and lenders.
• It can serve as a roadmap for your business as it grows and changes.
• It can help you to make better business decisions.

How to write a business plan?

There are many different ways to write a business plan, but most follow the same basic structure. Here is a step-by-step guide:

• Executive summary.
• Company description.
• Management and organization description.
• Financial projections.

How to write a business plan step by step?

Start with an executive summary, then describe your business, analyze the market, outline your products or services, detail your marketing and sales strategies, introduce your team, and provide financial projections.

Why do I need a business plan for my startup?

A business plan helps define your startup’s direction, attract investors, secure funding, and make informed decisions crucial for success.

What are the key components of a business plan?

Key components include an executive summary, business description, market analysis, products or services, marketing and sales strategy, management and team, financial projections, and funding requirements.

Can a business plan help secure funding for my business?

Yes, a well-crafted business plan demonstrates your business’s viability, the use of investment, and potential returns, making it a valuable tool for attracting investors and lenders.

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• 22 types of business objectives to meas ...

22 types of business objectives to measure success

Clear business objectives help you achieve your mission statement and long-term company vision. These objectives can range from financial objectives to organization specific objectives. Take a look at 22 types of business objectives you can set—plus, learn when to use business objectives vs. 14 other goal frameworks. 

Whether you work at a small business, a start up, or as a team lead at a larger enterprise, as a key business owner, you’re responsible for identifying the business objectives that will help your organization hit its long-term goals. Setting goals and strategic objectives is the best way to know where you’re going and how to get there. 

In this article, learn about 22 different types of business objectives and how to make them achievable. Then, take a look at the 15 different types of goals you can set, depending on why you’re setting those goals.

What is a business objective? 

Business objectives are the results you are aiming to achieve in order to accomplish your longer-term company vision. Think of business objectives as metrics to measure your overall business success.

Hitting your business objectives means you’re on the path towards achieving larger company goals. As such, business objectives should focus on large-scale organizational impact. Good business objectives are measurable, specific, and time-bound. 

22 types of business objectives

Set business objectives based on factors that measure and impact your organization’s success. For example, you might set the following business objectives:

Financial business objectives

1. Profitability: A profitability-focused business objective is important if your company is relying on outside investors. Achieving—and maintaining—profitability ensures your long-term success so you can make progress towards your overall company mission. 

2. Revenue: Revenue-focused business objectives help you balance your income with your costs in order to stay in business. You might set business objectives to achieve a certain annual revenue goal, or to increase revenue by a certain percentage over a period of time. 

3. Costs: Costs refer to how much money you’re spending on your business. Reducing costs can help you increase revenue and achieve profitability. Business objectives related to cost can help you control production or operations cost to improve your business’s financial performance. 

4. Cash flow: Cash flow refers to the money moving into and out of your business. Cash flow can be positive—when you’re making more than you’re spending—or negative—when you’re spending more than you’re making. Similar to profitability, a cash flow-oriented business objective can help set you up for long term financial success. 

5. Sustainable growth: In order to grow as a business, you need to grow sustainably. Setting business objectives around sustainable growth can help you plan your financial projections, employee costs, and other financial considerations. 

Customer-centric business objectives

6. Competitive positioning: A big element of your business strategy is thinking about how your product or service compares to others in the same market. By setting a business objective focused on competitive positioning, you can ensure your product or service reaches parity with what’s expected in the market, or use competitive positioning to outdo your competitors in a key area. 

8. Customer satisfaction: In order to succeed as a business, you need happy customers. Focusing on a customer satisfaction-based business objective can help you better serve your customers. Depending on the business objective, this might focus on a customer advocacy program, a better help desk, or something similarly customer-facing. 

9. Brand awareness: Your brand is what makes your organization stand out from the crowd. Brand awareness is an important way to understand how your customers think of your brand, and how aware they are of your distinct brand vs. your competitors. Understanding—and increasing—brand awareness is a key part of your long-term marketing strategy .

10. Sales: You’ll often find business objectives related to improving or refining the sales cycle. This could include anything from reducing customer acquisition cost (CAC), developing better lead tracking, increasing cross-selling, or something else.

11. Churn: In business, your churn rate refers to how many customers you lose over a set period of time. Reducing churn is a great way to increase your revenue and ensure your customers are satisfied with the product or service you provide. 

Internal business objectives

12. Employee satisfaction and engagement: Part of your business is how your employees feel about working there, too. Increasing employee satisfaction and engagement leads to happier employees, reduced burnout , and more effective teams. 

13. Employee retention: A key internal business objective is how long your employees spend at your company. Increasing tenure and reducing turnover can help you achieve more complex projects with knowledgeable employees. 

14. Company growth: In order to grow your business, you also need to grow the number of people you employ. Growing your company sustainably can be difficult—which is why businesses often set company growth as a key business objective. 

15. Organizational culture: Organizational culture is the ideals, values, and group norms that shape how team members interact within your company. Good culture drives employee engagement and increases retention, which is one of the key reasons so many companies set organizational culture-focused business objectives. 

16. Change management: Smoothly implement large-scale organizational change with change management . Though you typically won’t see organizations set this type of business objective year after year, it can be a helpful objective to set if you have large changes on the horizon. 

17. Productivity: At Asana, we don’t think of productivity as “doing the most you can,” but rather as a way to optimize your time and get your best work done. Increasing employee productivity can help your teams achieve their high-impact work more efficiently. 

18. Employee effectiveness: Teams don’t just need to be efficient—they also need to know the right things to work on. The best companies aim for efficiency and effectiveness—which is where an effectiveness-based business objective comes into play. To learn more, read our article about the difference between efficiency and effectiveness . 

19. Diversity and inclusion: A big part of a welcoming company culture is making sure your employees feel like they belong. Investing in diversity and inclusion programs can help your business be more welcoming to your current and potential employees. 

Regulation related business objectives

20. Quality control: Implementing quality control measures as a business objective can help you ensure your product or services are at the level you want them to be. This in turn leads to better customer relationships and overall increase in revenue. 

21. Compliance: If your business has any compliance needs to meet in the near future, setting those compliance requirements as a business objective will ensure you hit your targets on time. 

22. Sustainability or waste reduction: Some businesses set business objectives to reduce waste or increase sustainability. While this may not directly impact your business, proving that you’re environmentally minded can help you reach specific audiences you’re targeting. 

Which goal framework is right for you?

Figuring out exactly what type of goal you need to set can be tricky. Each goal framework is slightly different—and implementing the right one can help you achieve success. 

The type of goal you set will depend on the business activities you’re running and the specific goals you have. If your goals have a set time frame, you may want to go with short-term objectives, whereas larger goals have their own unique frameworks. 

If you’re not sure where to start, check out these 15 goal frameworks for different situations: 

1. Business objectives: Set goals based on operating factors that impact your company’s long-term success.

2. Business plan : Also called a business strategy plan. Document your business’ goals and plan out how you’ll get there.

3. Vision statement : Set an organization-wide North Star.

4. Big Hairy Audacious Goals (BHAGs) : Set organization-sized stretch goals .

5. Company values : Align your team around core principles. 

6. Strategic plan : Clarify your three to five year company goals during the strategic planning process. 

7. Strategic goal : Set the goals you want to achieve by the end of your strategic plan.

8. Critical success factors : Clarify the high-level goals you need to achieve in order to achieve your strategic goals. 

9. Strategic management : Execute against your strategic plan in order to achieve your company goals. 

10. Business goals : Set predetermined targets to achieve in a set period of time.  

11. Objectives and key results (OKRs) : Set and communicate annual company goals.

12. Key performance indicators (KPIs) : Set quantitative goals.

13. Project objectives : Share what you want to achieve by the end of a project.

14. Project deliverables : Identify a project’s output.

15. Project milestones : Mark specific checkpoints along a project’s timeline.

More goal setting resources

Clear goals are critical to keep your organization functioning. In addition to business objectives, check out our goal setting resource hub for tips on setting goals and achieving high-impact results. Then when you’re ready, get started with Asana for goal tracking. With Asana , you can connect your company goals to the work that supports them—all in one place. 

Related resources

Unmanaged business goals don’t work. Here’s what does.

How Asana uses work management to effectively manage goals

Beat thrash for good: 4 organizational planning challenges and solutions

Use critical success factors to support your strategic plan

2 signs you're saving too much for retirement, according to financial planners

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• While it's uncommon, it's possible to save too much for retirement, financial planners say.
• If you're saving too much, you might notice you're consistently going over contribution limits.
• And you might be missing other money goals that you've been working towards. 

Saving too much for retirement can be a bad thing, though it's not all that common.

"An overwhelming majority of people either are saving enough or not saving enough," says financial planner Brian Walsh of SoFi . "It's very rare that someone's actually saving too much for retirement."

However, if you're saving too much, there are two sure signs.

1. You're consistently going over the annual contribution limits

If you regularly over-contribute to your retirement plans , you might be saving too much for retirement, says financial planner Michaela McDonald.

Tax-advantaged retirement accounts have limits, only allowing savers to contribute a certain amount per year. For 2024, the limit on an IRA is $7,000, and $8,000 for those over 50. For 401(k) plans, the limit is $23,000 per person, per year, or $30,500 per year if you're age 50 or older.

Walsh says it's all about balance and not contributing only to limited retirement accounts. "It's great to save for retirement, but a lot of these retirement accounts have restrictions on when you can access the money without paying taxes or penalties," Walsh says.

Especially if you decide to retire early , saving in accounts that aren't dependent on your age is critical. "It really reduces your flexibility down the road," he says.

Contributing too much may mean that you might have to pay a penalty or take money out. And that might be a sign that you're saving too much.

2. You're not meeting your other money goals

If you're over-saving for retirement, it might mean that you're having trouble keeping up with your other goals.

"More commonly what we see come up is [people] ignoring all of their other saving goals and only saving for retirement," says Walsh. Short-term goals, like buying a house, taking a vacation, or starting a family, don't always make sense to sacrifice for retirement.

Instead, both financial planners recommend focusing on doing the things you're only able to do now, even if it means saving less for later on. "Maybe you're putting off having a child, or you're putting off moving into a bigger home that can fit your family because of your retirement worries, that's a little bit of a red flag," says McDonald. "You want to build a good life for yourself now and enjoy it." 

This article was originally published in July 2021.

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7 more states sue to block Biden's student loan handout plan as lawsuits pile up

18 states have now sued over biden's student loan plan.

Ted Cruz: Biden’s bid for student loan bailouts is a ‘vote buying scheme’

Sen. Ted Cruz, R-Texas, joins ‘The Bottom Line’ to discuss President Biden pitching another massive student loan handout.

President Biden's administration faces yet another lawsuit as a growing number of states seek to block his student loan handout plan, with Missouri and six other states filing a complaint on Tuesday.

Missouri Attorney General Andrew Bailey's lawsuit argues that Biden's "SAVE" plan, announced in February, is illegal and would cost American taxpayers $475 billion. Bailey's lawsuit comes just weeks after Kansas and 10 other states sued the Biden administration over the same plan.

"With the stroke of his pen, Joe Biden is attempting to saddle working Missourians with a half trillion dollars in debt. The United States Constitution makes clear that the President lacks the authority to unilaterally ‘cancel’ student loan debt for millions of Americans without express permission from Congress," Bailey told Fox News Digital.

"The President does not get to thwart the Constitution when it suits his political agenda. I’m filing suit to halt his embarrassing attempt to buy the 2024 election in direct violation of the law. The Constitution will continue to mean something as long as I’m Attorney General."

MORE STUDENT LOAN FORGIVENESS IS ON THE HORIZON, AS U.S. COLLEGES COMMIT TO COST TRANSPARENCY

President Biden's faces yet another lawsuit and a growing number of states seeking to block his student loan forgiveness plan, with Missouri and six other states filing a lawsuit on Tuesday. (Photo by Chip Somodevilla/Getty Images / Getty Images)

Joining Bailey in the lawsuit are the attorneys general of Arkansas, Florida, Georgia, Ohio, Oklahoma and North Dakota.

Missouri and Arkansas both participated in the lawsuit that ultimately brought an end to Biden's previous student loan plan last year. The Supreme Court decided 6-3 that Biden's plan was unconstitutional.

BIDEN SANCTIONS ISRAELI SETTLERS IN WEST BANK AFTER SHOOTING OF US TEEN

"President Biden has already lost on this question once, and he is refusing to follow the law. The Supreme Court could not have been clearer: President Biden cannot unilaterally cancel student debt and force taxpayers to bear the multi-billion-dollar cost," Arkansas AG Tim Griffin told Fox News Digital.

Missouri and Arkansas both participated in the lawsuit that ultimately brought an end to Biden's previous student loan forgiveness plan last year. The Supreme Court decided 6-3 that Biden's plan was unconstitutional. (Kent Nishimura / Los Angeles Times via Getty Images / Getty Images)

The lawsuit argues that Biden's SAVE plan is part of "a long but troubling pattern of the President relying on innocuous language from decades-old statutes to impose drastic, costly policy changes on the American people without their consent."

The White House did not immediately respond to a request for comment from Fox News Digital, but the Biden administration previously defended the SAVE program against the lawsuit led by Kansas.

"The Department does not comment on pending litigation. However, Congress gave the U.S. Department of Education the authority to define the terms of income-driven repayment plans in 1993, and the SAVE plan is the fourth time the Department has used that authority," an Education Department spokesperson said at the time. "The Biden-Harris Administration won’t stop fighting to provide support and relief to borrowers across the country – no matter how many times Republican elected officials try to stop us."

SOME STUDENT LOAN BORROWERS ARE GETTING REFUNDS ON TOP OF LOAN FORGIVENESS

President Biden has repeatedly tried to forgive student loans through executive action, only to be thwarted by the Supreme Court. ((Photo by MANDEL NGAN/AFP via Getty Images) / Getty Images)

Tuesday's lawsuit lands just one day after Biden announced yet another plan to cancel student loan debt. This latest one focuses on cutting loans that have exceeded their principal amount due to interest. It would cut up to $20,000 in accrued interest for borrowers, but borrowers who make less than $120,000 or couples who make less than $240,000 would be allowed to cut all of their accrued interest beyond the principal amount.

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The result would see roughly 23 million Americans having their loans cut down to the principal amount.

While Bailey has no legal action to announce regarding the interest cut, he said his office is monitoring it.

"We beat his unlawful student loan plan in court last summer, so he quickly rolled out Plan B. Now that we’re challenging that, he’s panicked and is rolling out a Plan C. We will continue to watch him closely and take action whenever he’s overstepped his authority," Bailey told Fox.

Read the full Missouri lawsuit below: (Mobile users click here)

Inside the college football ‘Super League,’ one powerful group’s idea to fix a ‘dead’ system

One league overseeing college football’s highest level. No more conferences as we’ve known them. Playoff berths being decided solely on the field. Promotion and relegation for smaller schools. Players being paid directly. NIL and the transfer portal, managed.

A group of influential leaders wants to make all this happen soon — and they are pitching it as the best way forward for a sport they believe needs saving.

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Several college presidents, Roger Goodell’s primary lieutenant at the NFL and some of sports’ top executives have devised a plan — dubbed by outsiders as a “ Super League ” — to completely transform college football, those involved in the group “College Sports Tomorrow” (CST) told The Athletic . Although the plan has drawn skepticism from within the sport’s current institutions, the people behind the ideas believe they must be implemented.

“The current model for governing and managing college athletics is dead,” Syracuse chancellor Kent Syverud told The Athletic during an interview.

West Virginia president Gordon Gee added, “We are in an existential crisis.”

Syverud and Gee are part of CST, a 20-person group which also includes the NFL’s No. 2 executive Brian Rolapp, Philadelphia 76ers owner David Blitzer and lead organizer Len Perna of TurnkeyZRG, the search firm that places nearly all the top conference commissioners, including recently the Big Ten’s Tony Petitti.

They are trying to implement a drastically new system that would replace the NCAA and the College Football Playoff and potentially provide a solution for the hurricane of current and future lawsuits aimed at the business of the sport, plus the NIL and transfer portal issues that, they believe, have put college athletics as a whole in peril.

The current CST outline would create a system that would have the top 70 programs — all members of the five former major conferences, plus Notre Dame and new ACC member SMU — as permanent members and encompass all 130-plus FBS universities.

The perpetual members would be in seven 10-team divisions, joined by an eighth division of teams that would be promoted from the second tier.

The 50-plus second-division teams would have the opportunity to compete their way into the upper division, creating a promotion system similar to the structure in European football leagues. The 70 permanent teams would never be in danger of moving down, while the second division would have the incentive of promotion and relegation.

The playoffs would not require a selection committee, as the eight division winners and eight wild cards from the top tier would go to the postseason. The wild-card spots would be determined by record and tiebreakers, much like the NFL.

CST borrows ideas from leagues like the NFL, Premier League and MLS to create a system that they believe would bring more television value and sustainability. Not coincidentally, some of its most influential members have direct ties to those leagues.

Thus far, the group is struggling to gain traction with the schools that would play in their proposed “Super League.” The ACC board of directors heard a presentation from the group in February. However, planned dinners with administrators from the Big Ten, SEC and Big 12 all were called off. Spokespersons for the Big Ten and SEC said commissioners Petitti and Greg Sankey, respectively, have not met with Perna’s group.

Leagues have been hesitant and canceled meetings so as not to upset their current broadcast partners, including ESPN and Fox, according to one executive briefed on the commissioners’ thoughts.

Chief among the obstacles this new venture faces are the billions of dollars in TV deals that all the top conferences have locked in with the major networks: ESPN/ABC, Fox, NBC and CBS. The FBS conferences recently signed off on a six-year, $7.8 billion extension with ESPN for the exclusive rights to the expanded College Football Playoff.

The Big Ten’s deals run through the 2029-30 season, the Big 12’s run through 2030-31 and the SEC’s exclusive deal with ESPN runs through 2033-34. One TV executive called the idea that there is a lot more untapped money in the market “naive.” One CST executive said that the major networks with existing deals would likely need to buy into the plan before it could go to the open market in the 2030s.

Universities would own a percentage of the league, a model derived from MLS where it was devised by former president Mark Abbott, who is involved with CST. Unlike the soccer league, the revenue distribution would not be an even split among all competitors, as top brands like Alabama and Notre Dame would receive more of the financial pie. CST believes there would be added value in negotiating TV deals as one entity and creating broadcast windows that make more sense, much like the NFL’s approach.

While the CST model would eliminate the longtime conference structure for football, it would create one entity to negotiate with a prospective union that would represent the players on NIL, transfer portal and salary structure rules. This embrace of collective bargaining could allow it to avoid the antitrust issues that have limited the NCAA’s ability to enforce its own rules.

“The only way to solve the problem is to have a solution that is legally defensible, politically acceptable, commercially prudent and is able to strike a partnership with student athletes in a way that’s really good for them,” Perna told The Athletic .

College administrators are particularly concerned about the House v. NCAA class-action suit in Northern California, seeking NIL revenue denied to athletes prior to 2021 rule changes. If the plaintiffs are successful, the NCAA and the power conferences could be on the hook for billions in damages. The House case is one of several potentially crippling federal antitrust suits related to athlete employment rights and NIL compensation.

“I really think conferences in the NCAA are at a very significant likelihood of going bankrupt in the near future because of the lawsuits, both the ones that are going to trial soon and those that will follow,” Syverud said.

Perna started on the project three years ago and is viewed as its figurehead. He is well-connected in college sports through his role at Turnkey.

According to two executives briefed on the proposal, one reason the FBS commissioners last month self-imposed a March 15 deadline to approve the six-year College Football Playoff extension was to stave off CST’s push. During The Athletic ’s reporting, executives involved in college football were inquiring, “What do you know about the Perna/Rolapp group?” They conveyed alarm about what could be formulated, along with doubt as to why this group would be the one to solve the complex issues facing the NCAA.

While critics in media and college sports who have heard about CST have warned of private equity’s involvement, Perna insisted this is not a money-making venture for the individuals in his group. He said CST raised initial money to pay for fees incurred but declined to say how much. The plan is for the new format to create more revenue on the premise that there is more TV money to be generated in a model comparable to the NFL’s TV setup.

“We’ve been looking at something that’s large enough that it gives everybody a chance to compete, and that does translate into about 70 schools,” Syverud said. “That also creates content that’s more valuable so that it generates the resources to do more things that the university presidents think are important for college sports. It is not the case that the money to do what’s right for our college athletes in football is just going to emerge from nowhere. Somehow it has to be generated. That’s what we are trying to figure out, as well.”

Multiple prominent college leaders in recent months have spoken bluntly about a future in which schools directly pay their players. Private equity funding could provide schools an influx of capital to address those legal matters and competitively compensate their athletes, in return for a stake in the schools’ athletics business.

One top college football administrator claimed CST is trying to “buy college football.” CST countered that it is only trying to create a system for football that in turn would result in the finances needed for non-revenue-generating sports to survive and thrive. Under the plans, the non-football sports would stay in their current conference structure.

“Athletes need to be paid and are going to be paid,” Syverud said. “Most of the rules against paying athletes, including some of those that are still in place, are likely to fall in the courts. We’re going to need to sustain women’s sports, Olympic sports and we’re going to have to have competitive equity and some methods to have a labor structure that is sensible. For all that, I think you need a more centralized national college league.”

CST is not alone in trying to find solutions. The SEC and Big Ten, the two most powerful football conferences, have formed an advisory alliance focused on “a sustainable future of college sports, ” as one clear example. At least one school, Florida State, has been actively exploring a private equity partnership of its own.

Rolapp’s involvement in CST has raised eyebrows. He was the mastermind of the NFL’s current $110 billion in TV deals and has been sought for top college commissioner jobs. While it is in the best interest of the NFL to have its feeder system of college football be strong, executives briefed on Rolapp’s role insist the league is not involved. Rolapp declined to comment.

CST leaders maintain their intentions are pure — and that they are in a hurry to get going. An avalanche of legal activity could dramatically increase the likelihood that their plan or something like it could take hold. Even prior to that day of potential foundational change, CST wants to lead from the front, not behind.

“Speed is our friend,” Gee said. “We don’t have a lot of time to waste.”

(Top illustration: John Bradford for The Athletic ; Photos: iStock)

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